India's largest lender posted its first quarterly loss in 17 years for the three months ended in December, but its chairman told CNBC that the rest of the year looks much better.
The State Bank of India reported a net loss of 24.16 billion rupees ($361.8 million) for the December quarter, compared with a profit of 18.20 billion rupees ($272.5 million) a year earlier. The bank blamed lower trading income from higher bond yields, higher loan loss provisions and significant investment depreciation for the loss.
"Two factors are impacting our profit. Loan loss provision takes the large chunk," Rajnish Kumar, chairman of SBI, told CNBC's Oriel Morrison in Manila, the Philippines, on Friday. "Dictated costs are very, very elevated and not affordable."
Loan loss provisions are counted as expenses that are set aside as allowance for uncollected loans and loan payments.
SBI said its gross non-performing assets increased from 1.86 trillion rupees ($27.8 billion) in September to a staggering 1.99 trillion rupees ($29.8 billion) as of December.
"Last year, in terms of profits, in terms of asset quality, it was a big challenge," Kumar said. "But this year onward, we are expecting that we will be in a much better position and this year looks much, much better."
SBI will release its full fiscal 2018 earnings on May 22, according to Kumar. In India, the financial year usually starts on Apr 1.