State Bank of India posts record quarterly loss after RBI rule change

State Bank of India (SBI) reported its deepest-ever quarterly loss on Tuesday, far beyond analyst estimates, as the country’s biggest lender set aside more provisions for bad loans after a change in banking regulation.

Net loss for the three months ended March 31 was 77.18 billion rupees ($ 1.13 billion), versus an average 12.85 billion rupee loss from 16 analyst estimates complied by Thomson Reuters. The result also compared with a restated net loss of 34.42 billion rupees in the same period a year earlier.

Banks saw soured loans and provisions surge in the quarter after the Reserve Bank of India (RBI) in February eliminated half a dozen loan restructuring schemes to hasten the clean-up of near-record levels of bad debt. Most state-run banks that have reported quarterly earnings so far have posted losses.

SBI’s bad-loan provisions for the quarter more than doubled from a year earlier to 280.96 billion rupees. Gross bad loans as a percentage of total loans rose to 10.91 percent from 10.35 percent three months earlier and 6.90 percent a year prior, the lender said in a statement.

Net interest income for the quarter fell 5.2 percent to 199.74 billion rupees.

Shares of the lender rose as much as 6.2 percent after the results in a broader Mumbai market that was 0.1 percent higher.