Mumbai: The country's largest lender State Bank of India (SBI) said its net profit more than doubled to 3,751.56 crore for the quarter ended June 30, 2012, as compared to 1,583.55 crore recorded in the corresponding period of last year.
SBI's non-performing assets (NPA) rose sharply to 4.99 percent as on June 30, 2012 raising concerns over the bank's asset quality. The bank's gross non-performing assets was at 3.52 percent at the end of the first quarter of 2011-12 financial year.
At the end of the last financial year bank's non-performing assets was 4.44 percent.
Increase in non-performing loans led to a sharp drop in the company's share price. Share price of SBI slumped by 4.03 percent to 1,892.45 at the Bombay Stock Exchange (BSE) after the announcement of the first quarter financial results.
"SBI's numbers disappointed on the NPA front. While we were expecting about 4,000 crore increase in gross NPAs, the bank reported more than 7,000 crore increase," said Vaibhav Agrawal, vice president, research-banking, Angel Broking.
Agarwal said the bank's net NPA and interest income were also disappointing.
"The numbers are overall reflective of the weak macro-economic trends and while we will watch out for the management's commentary on the outlook for slippages and recoveries, but overall for the next couple of quarters at least, asset quality concerns are likely to continue," he said.
Earlier UBS downgraded SBI to "sell" from "buy", saying a weak monsoon would put further pressure on bank's non-performing assets.