MUMBAI: The State Bank of India (SBI) has reported a 28 percent on-year growth in net profit at Rs 18,331 crore for the quarter to September driven by improved asset quality and higher credit sales. The nation’s largest lender had posted Rs 14,330 crore in net profit in the year-ago period.
The new chairman CS Setty, who assumed office only last month, said that in the reporting quarter, the bank earned an interest income of Rs 1.14 trillion, up 12.32 percent on-year, while net interest income grew at a lower pace of 5.37 percent on-year to Rs 41,620 crore from Rs 39,500 crore in the year-ago period.
The interest income grew lower because the net interest margin (NIM) came down by 15 basis points (bps) on-year and 8 bps on a quarterly basis to 3.14 percent from 3.22 percent in the quarter-ago period and 3.29 percent in the year-ago period.
Of this, domestic NIM declined to 3.27 percent from 3.35 percent in the June quarter and 3.43 percent in the year-ago period. But the chairman said the NIM has stabilized and that he does not see any further fall, indicating that there will not be any more increase in deposit rates.
On the asset quality side, the bank that controls nearly a quarter of the systemwide assets saw all-round improvement with gross NPAs improving to 2.13 percent from 2.21 percent in June 2024, and from 2.55 percent in September 2023, while net NPAs declining to 0.53 percent from 0.57 percent in June 2024, and from 0.64 percent in September 2023.
In absolute terms, the gross non-performing assets came down by 4.14 percent in the second quarter to Rs 83,369 crore from Rs 84,226 crore in the quarter-ago period and Rs 86,974 crore in the year-ago period. Similarly, net NPAs declined by 4.96 percent on a yearly basis to Rs 20,294 crore from Rs 21,555 crore in the year-ago period and Rs 21,352 crore sequentially.
The provision coverage ratio improved by 21 bps to 75.66 and the slippage ratio improved by 2 bps on-year to 0.68 percent. The slippage ratio for the reporting period increased by 5 bps on-year and stands at 0.51 percent.
Total deposits increased by 9.13 percent on-year to Rs 51.17 trillion from Rs 46.89 lakh crore in the year-ago period. Of the total deposits, current account deposits increased by Rs 2.78 trillion, which is 10.05 percent more than the year-ago period. Savings bank deposits rose to Rs 16.88 trillion from Rs 16.33 trillion. Term deposits, which have the largest share in total deposits, increased by 12.51 percent on-year to Rs 29.45 trillion from Rs 26.17 trillion in the year-ago period. Deposits at overseas branches stood at Rs 2.07 trillion.
On the advances front, Setty said gross advances grew 14.93 percent on-year to Rs 39.21 trillion of which the domestic corporate loan book increased to Rs 11.57 trillion from Rs 11.39 trillion in the June quarter, and Rs 9.78 trillion a year ago. SME credit grew by 17.36 percent to Rs 4.57 trillion from Rs 3.89 trillion.
Setty also said the bank has a corporate loan pipeline of Rs 6 trillion.
Setty said the board has given approval for raising long term bonds worth up to Rs 20,000 crore through a public issue or private placement in the remainder of the fiscal.
On the stake sale in Yes Bank, Setty said since the beginning of the fiscal, Yes Bank has allotted 255,97,61,818 equity shares of Rs 2 each pursuant to the exercise of share warrants by the other two investors for 127,98,80,909 equity shares to each investor and 1,92,41,336 equity shares of Rs 2 each under the approved employee stock option scheme. Consequently, the stake in Yes Bank has come down from 26.13 percent to 23.98 percent.
Despite the good set of numbers, the SBI counter tanked 1.9 percent on the BSE to Rs 843.25.