State Bank of India (SBI) reported an 8 per cent year-on-year (y-o-y) increase in second quarter standalone net profit at ₹14,330 crore on the back of rise in net interest income and non-interest income, and decline in provisions.
India’s largest bank had reported a net profit of ₹13,265 crore in the year ago quarter. Sequentially, net profit in the reporting quarter is down 15 per cent vis-a-vis first quarter’s ₹16,884 crore.
Chairman Dinesh Kumar Khara allayed fears regarding growth in the unsecured loans portfolio, emphasising that the gross non-performing assets (GNPA) ratio in this portfolio was only 0.69 per cent.
He underscored that 94 per cent of these loans have been given to government sector employees and the rest to employees of highly rated corporates.
He observed that overall the bank’s GNPA ratio at 2.55 per cent (versus 3.52 per cent as at September-end 2022) continues to be at its lowest level in more than 10 years.
Operating profit declined 8 per cent y-o-y to ₹19,417 crore (₹21,120 crore). Khara attributed the fall in operating profit to operating expenses rising 34.60 per cent y-o-y to ₹30,874 crore (₹22,938 crore) on account of making provisions for the proposed wage revision.
Net interest income (difference between interest earned and interest expended) was up 12 per cent at ₹39,500 crore (₹ 35,183 crore). Non-interest income — comprising fee-based income, treasury income and recovery in written-off accounts — rose 22 per cent to ₹10,791 crore (₹8,874 crore).
Loan loss provisions declined about 10 per cent y-o-y to ₹1,815 crore. The bank received provision write-back on standard assets (amounting to ₹720 crore against ₹125 crore provision made in Q2FY23). Further, it also received write-back on other provisions (amounting to ₹979 crore against ₹898 crore provision).
Net interest margin/NIM (whole bank) edged down to 3.29 per cent from 3.32 per cent. Domestic NIM declined to 3.43 per cent from 3.55 per cent.
“Our effort (on NIM) will be to stay around these levels…we re-priced our FDs in one particular bucket, essentially to take care of depositors interest and that is the only portion of our liability book which will have its impact on NIM…,” the SBI Chief said.
Gross advances grew 12.39 per cent y-o-y to ₹34,11,252 crore. The lender expects a credit growth of 13-14 per cent in FY24.
“Corporate lending pipeline is at ₹4.77-lakh crore. Of this Rs 1.50 lakh crore is awaiting disbursement and the remaining are proposals under consideration for sanctions,” Khara said.
Total deposits were up 11.91 per cent y-o-y to ₹46,89,218 crore,