SBI Q1 net drops 6.7% to ₹6,068 cr. on mark-to-market losses

Delivered ‘reasonable’ outcomes in business, profitability and asset quality: Chairman Khara

The country's largest lender State Bank of India (SBI) on Saturday reported a 6.7% drop in its standalone profit after tax to ₹6,068 crore for the quarter ended June, on account of mark-to-market (MTM) losses.

On a consolidated basis, its PAT stood at ₹7,325.11 crore as against ₹7,379.91 crore a year earlier.

SBI Chairman Dinesh Khara said that during the quarter the bank had delivered reasonable outcomes in business, profitability and asset quality.

"While net profit and operating profit have been impacted by the MTM losses due to hardening of bond yields, our core revenue streams have remained intact with good growth over previous year," Mr. Khara told reporters.

The lender took a hit on account of MTM losses amounting to ₹6,549 crore on its investment book, which had an adverse impact on the Return on Assets (RoA) and Return on Equity (RoE), which were down 9 basis points (bps) and 203 bps, respectively.

Mark-to-market (MTM) losses occur when the financial assets held are valued by the market at a price lower than the purchase price.

Mr. Khara said as the government securities (g-sec) yields soften, the bank would be able to recover most of the MTM losses during this year.