State Bank of India (SBI) reported a loss of Rs 7,718 crore ($1.1 billion) - its biggest ever -in the January-March quarter, as the country's biggest lender set aside more provisions for bad loans after a change in banking regulation..
The loss for the three months to March 31 was deeper than what the market had expected.
Analysts on average had expected SBI to report a loss of Rs 1,285 crore, according to Thomson Reuters data.
In the December quarter, SBI had posted a loss of Rs 2,416 crore.
SBI share pricesrallied after the results were announced.
Shares were up 5 per cent at Rs 256 in afternoon trade.Gross bad loans as a percentage of total loans rose to 10.91 per cent from 10.35 per cent three months earlier and 6.90 per cent a year prior, the lender said in a statement.In March quarter, SBI net interest income rose to Rs 19,974 crore, from Rs 18,688 crore in December quarter.Tighter Reserve Bank of India (RBI) rules announced in February, which did away with half a dozen loan restructuring schemes, have led to banks reporting a surge in bad loans in the March quarter, and several of them reporting losses.
This led to SBI's provision for bad loans jumping to Rs 24,080 crore, from Rs 17,760 crore in December quarter.Earlier this month, another state-run lenderPunjab National Bank (PNB) had reported a net loss of Rs 13,417 crore in the fourth quarter, the biggest ever by an Indian bank as PNB booked provisions to cover a massive fraud.In what has been dubbed the largest fraud in Indian banking history, PNB - the second-biggest state-run lender and fourth-biggest overall - disclosed in February that two jewellery groups had defrauded it of more than $2 billion, raising credit overseas from mostly other Indian banks with fake guarantees issued by rogue PNB staff.