Public sector lender Bank of Baroda said profit in third quarter fell sharply by 56 percent to Rs 111.8 crore, dented by higher provisions but supported by net interest income and operating income.
SBI December quarter net profit is seen at Rs2,059.4 crore, according to a Bloomberg poll of 16 analysts.
Thus, the bad loan provisions for the quarter rose 92.61 per cent to Rs 3,155 crore as against Rs 1,638 crore in the year-ago period.
Among other parameters, the net interest margin improved to 2.72 per cent during the quarter from 2.31 per cent in the year-ago quarter. Another brokerage Prabhudas Liladhar projects an over 5.5 per cent decline in bank's PAT at Rs 2,464.7 crore.
"Going forward there is a lot of optimism", Kumar said, adding SBI aimed to limit the rise in bad loans and provisioning costs at 2 percent in 2018/19. Over Rs 6,000 crore in provisions were due to the divergences.
The results are not comparable from the year-ago period because SBI merged its five associate banks with effect from 1 April. He also said there may also be cases where there can be a write-back of already provided for accounts.
Kumar made it clear that the new infusion is not for covering loan losses through provisions, but would serve as growth capital. The ratio of bad loans jumped to 5.61 per cent of advances from 4.24 per cent.
Gross non-performing assets (NPA) increased to 20.64 per cent (17.18 per cent), and net NPAs, to 10.9 per cent (8.99 per cent).
Reiterating that the bank is doing well on various other measures, he tried to paint an optimistic picture for the future saying, "there is banking beyond NPAs as well".
The SBI scrip closed 1.68% down at Rs 296.40 a piece on the BSE as against a 1.18% correction in the benchmark.