SBI Quarterly Report: India’s largest public sector bank, State Bank of India (SBI), posted a 68% year-on-year increase in the bottom line for the quarter that ended December 31 to Rs 14,205 crore.
Notably, it was the highest-ever quarterly profit as the lender saw a dip in provisions and an improvement in interest income.
The bank’s net profit beat the estimated net profit of Rs 13,212 crore, as per a poll of 18 brokerages by Bloomberg.
The bank‘s provisions dipped 17% on-year to Rs 5,761 crore in the third quarter due to improved asset quality.
Net interest income increased by 24% on-year to Rs 38,069 crore in the third quarter of fiscal 23. The domestic net interest margin (NIM) increased 29 basis points (bps) to 3.69%.
“The bank is in a position to maintain its margin on account of savings deposit growth and by deploying excess liquidity,” Dinesh Khara, Chairman, SBI, said in a post-earnings call. He added the bank has excess liquidity to the tune of Rs 3.2 trillion.
The Mumbai headquartered bank noted 18% growth in its gross advances to Rs 31.3 trillion in the quarter ended. There was a 9.5% decline in deposits to Rs 42 trillion.
SBI’s deposit growth is aligned with industry growth and is seeing good growth in savings deposits. An 11 percent increase in term deposits drove the deposit growth.
“As of now, we are comfortably placed to ensure that we are able to support balance sheet growth as far as the loan book is concerned,” he said.
The bank’s loan book rose by 17.60 percent, all thanks to an 18 percent on-year rise in retail loans.
Within retail, housing loans grew 14 percent, contributing the largest share. The fastest-growing segments, nevertheless, were unsecured personal loans and gold loans.
The corporate loan book of SBI noticed an expansion of 18 percent. Within the corporate loan book, lending to roads and ports in infrastructure, the iron and steel sector, and services showed significant growth.
“We expect growth will be somewhere between 14-16 percent for FY23,” said Khara in post-quarterly results interaction with media.
Operating Profit:
At an operational level, the bank posted a 36% increase in its pre-provisioning operating profit (PPOP) to Rs 25,219 crore in the quarter under consideration. Non-interest income rose 32 percent to Rs 11,468 crore.
Asset Quality:
The public sector bank reported a gross non-performing asset (NPA) ratio of 3.14% as of December 31, a decline of 136 bps on-year and 32 bps sequentially. The net NPA ratio dipped 57 bps on-year and 3 bps sequentially to 0.77%.
The provision coverage ratio was 76.12% in the quarter-ended, up by 490 bps.
Bank’s fresh slippages were Rs 3,098 crore in Q3FY23, while total reductions in NPAs, including recoveries and upgrades, came in at Rs 11,667 crore during the quarter.
The bank’s capital adequacy ratio was 13.27% as of December 31, 2022, against 13.23% a year ago.