Significant improvement in asset quality and lower loan-loss provisions helped State Bank of India  post highest-ever quarterly standalone net profit in the second quarter at ₹ 7,627 crore.

Resolution of the DHFL account, which allowed the  bank to write-back provisions amounting to ₹4,000 crore, also supported SBI’s bottomline.

The net profit in the second  quarter  ended September 30, 2021 was 67 per cent up year-on-year (yoy) vis-a-vis year-ago quarter’s ₹4,574 crore.

Slippages down

Slippages were about 52 per cent lower yoy at ₹4,176 crore in Q2FY22 against ₹15,666 crore in the first quarter (Q1FY22) ended June 30, 2021.

Dinesh Kumar Khara, Chairman, emphasised that the bank could pull back the first quarter’s retail segment slippages.

“This is the reason for the much lower slippages and also the accounts are performing well.

“Also, our ground level forces have also improved collections. Our collection efficiency stands at about 95 per cent,” he said.

The net interest income  was up about 11 per cent yoy to ₹31,184 crore (₹28,181.50 crore in the year-ago quarter).

Other income, including profit/loss on sale of assets, profit/loss on revaluation of investments (net), earnings from foreign exchange and derivative transactions, recoveries from accounts previously written off, dividend income, etc., declined about 4 per cent yoy to ₹8,208 crore (₹8,528 crore).

Loan-loss provisions declined 52 per cent yoy to ₹2,699 crore against ₹5,619 crore.

GNPA position improves

GNPA position improved to 4.90 per cent of gross advances as at September-end 2021 against 5.32 per cent in the preceding quarter.

Net NPAs position too improved to 1.52 per cent of net advances against 1.77 per cent in the preceding quarter.

As at September-end 2021,domestic advances increased about 5 per cent yoy to ₹ 21,56,055 crore. Foreign offices advances were up about 16 per cent yoy to ₹3,74,722 crore.

Within domestic advances, retail personal advances saw a 15 per cent yoy growth; agriculture (about 2 per cent) and SME (about 1 per cent). However, corporate advances de-grew about 4 per cent.

Khara attributed the muted scenario in corporate advances to working-capital limit utilisation continuing to be low.

“However, credit demand appears to be on the rise with increasing economic activities across India. Corporates too have started planning for future investments, which will create demand for credit going forward,” he said, adding that SBI will see an overall credit growth of 9-10 per cent in FY22.

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