Analysts expected SBI to report provisions of Rs 6,173 crore.
State Bank of India, on February 5, reported a 62 percent year-on-year (YoY) rise in net profit to Rs 8,431.9 crore for the quarter ended December, which was above analysts’ expectations of Rs 7,957.4 crore.
The sharp rise in the bottomline of the lender was down to a 32.6 percent on-year decline in provisions to Rs 6,974 crore. Analysts expected the state-owned lender to report provisions of Rs 6,173 crore
While over provisions declined on-year, loan-loss provisions in the quarter rose to Rs 3,096 crore from Rs 2,290 crore in the year-ago period. Overall, COVID-19 related provisions stood at Rs 6,183 crore, the lender said.
SBI’s restructuring book under the COVID-19 resolution plan – 1.0 and 2.0 was at Rs 32,895 crore, or 1.2 percent of loan book, at the end of the quarter.
The state-owned lender’s net interest income for the reported quarter grew 6.5 percent year-on-year to Rs 30,687 crore, which was below Street’s estimate of Rs 31,115.3 crore. However, the net interest margin improved 6 basis points year-on-year to 3.4 percent, which was in line with expectations.
SBI said that overall credit growth in the quarter was at 8.5 percent on-year with domestic loans growing at the click of 6.5 percent, largely in line with Street’s estimate.
The loan growth was led by the retail book of the lender, which grew 14.6 percent while home loans rose by 11.2 percent on-year. Growth in the corporate and small businesses segment has also picked up during the quarter, SBI said.
SBI withdraws controversial circular on pregnant women candidates
Asset quality of the bank continued to see strong improvement as gross non-performing assets ratio came in at 4.5 percent for the quarter as against 4.9
percent in the previous three-month period.
Similarly, the net NPA ratio improved to 1.34 percent for the quarter against 1.52 percent in the previous quarter. Slippages jumped during the quarter on a year-on-year basis to Rs 2,334 crore but below analysts’ expectations of Rs 9,500 crore to Rs 11,000 crore.
Tatas gets loan commitment from SBI-led consortium for Air India
Sequentially, though, slippage in the December quarter was lower than the Rs 4,176 crore reported in the previous quarter. The slippage ratio was at 0.37 percent against 0.66 percent in the previous quarter.
On the operating front, SBI had a modest quarter as pre-provision operating profit grew 6.9 percent on-year to Rs 18,522 crore, which was slightly higher than Street’s estimate of Rs 18,437 crore.Shares of the state-owned lender ended 2 percent lower at Rs 529.45 on the National Stock Exchange on February 4.
