MUMBAI: The nation’s largest lender State Bank of India has achieved a slew of milestones—being the most profitable corporate entity for the second quarter with a Rs 20,160 crore in post-tax profit, aided partly by a one-time gain from part sale of its investment in Yes Bank, the first bank to cross the Rs 100-trillion business milestone and also having the largest balance-sheet that has crossed the Rs 70-trillion, adding over Rs 4 trillion in the reporting quarter over the previous quarter.
All the numbers are from core business or standalone and not of the group. In comparison, the closest two—Tata Consultancy Services and Reliance which used to be the most profitable company for ages – pale in size. While TCS has notched up Rs 12,904 crore in income for the September quarter, Reliance Industries is way below on a standalone basis at Rs 9,129 crore; but with Jio Platforms’ Rs 7,375 crore and the retail arm’s Rs 3,439 crore, and including a one-off gain of Rs 8,924 crore from the sale of its stake in Asian Paints, the consolidated number totalled Rs 22,092 crore. Excluding this, the consolidated number prints in only at Rs 13,168 crore.
As against this, SBI has earned just Rs 3,868 crore from the sale of 13.2% in Yes Bank to SMBC, which brings down the profit from core operations to Rs 16,292 crore for the quarter, way ahead of Reliance. Also, SBI’s all the subsidiaries’ numbers are not available now as only two of the key five are listed.The publicly traded SBI Cards reported Rs 445 crore of net income while the other listed arm SBI Life printed in Rs 494.6 crore in post-tax income and the unlisted SBI General Insurance is reported to have earned Rs 422 crore, while the numbers for SBF Mutual Funds which is the industry leader and that SBI Caps are not available.
Yet, adding the available three arms’ profits, the consolidated number scale past Rs 21,522 crore. Meanwhile, addressing the earnings presser here Tuesday afternoon, chairman CS Setty said, the bank earned Rs 20,160 crore in post-tax profit, up 10 percent on-year in the September quarter driven by two-decades bets asset quality and robust income from fresh loans, even though the total net interest income printed in 3.3 percent more at Rs 42,985 crore, while operating profit rose by 8.91 percent on-year to Rs 31,904 crore.
The bank beat the street on almost all key metrics. Interest income of Rs 1,19,654 crore in the quarter under review, up 5 percent while interest expended rose 6 percent to Rs 76,670 crore in the quarter under review. He also said, the bank set a milestone with total business crossing the Rs 100-trillion mark, which makes it the 53rd largest bank globally, while chief financial officer and deputy managing director Salony Narayan said the bank added Rs 4 trillion to the balance sheet, which crossed the Rs 70 trillion mark.
The asset quality improved significantly during the quarter with the gross NPA ratio declining to 1.73 from 1.83, or to Rs 76,243 crore from Rs 78,039.7 crore and the net NPA ratio easing to 0.42 from 0.47 which is the lowest in over two decades, or falling to Rs 18,460 crore from Rs 19,908 crore. As a result, provisions declined to Rs 5,400 crore from Rs 4,506 crore. The key profitability metric net interest margin dropped 18 bps to 3.09 percent for the quarter from 3.27 percent but the chairman said the margin has bottomed out.
The total advances grew 12.73 percent, while domestic advances grew 12.32 percent. This along with the robust loan demand has the chairman adding 100 bps more growth target for the current fiscal at 12-14 percent from 10-12 percent earlier. Retail advances grew 15.09 percent, led by SME advances which grew 18.78 percent, and by agri advances grew 14.23 percent and retail personal advances clipped 14.09 percent, taking the total RAM book well past the Rs 25 trillion mark.
