After a season of low profits from correctional provisioning, this quarter's growth in provisions to INR 29.2 bln (21.6 bln Sep 10) or $0.55 bln was more easily absorbed as NII from loans jumped to INR 104 bln or $2.06 bln at the new extreme dollar rates. 22% jump on the Gross NAs and 46% on Net NPAs being still a pressure on growth.  Last year in September they had scored 81.14 bln in NII and Net NPAs were still high because of the bank's customer profile at 1.70%, the growth to 2.04% in line with the sector's results

Thus the PaT is a good INR 2810 Crs or $560 mln a growth in double digits over last year September. Now SBI has stepped into a negative spiral of sentiment on the sector Moody's choosing this time to derate the Indian banking sector even though it is insulated from global harakiri in the sector (apparently as indian corporate encourage limited ratings business) The sectoral rating by Moody's as the downgrade on the Standalone Financial Strength rating to D+ earlier do not affect any credit offerings of the banks, incl PSU ECBs and Infra Bonds by the InfraCos

The market could have expected a 30% grow back in profits but that does seem unlikely from here Fee Income is apparently flat from last year as expected. According to reports, NPAs start climbing down in the second half odf the year as Pratip Choudhary had recommended / guided since the wipeout in March 2011 Grodss NPAs at 4% however mean the bank will be held to close scrutiny from here

Posted via email from The India Investment Post