SBI net jumps 81%, NPAs shrink

Net interest income rises 16% to ₹26,642 cr. while non-interest income climbs 18%

State Bank of India (SBI) reported first-quarter net profit increased 81% to ₹4,189 crore, aided by an improvement in asset quality and gains from sale of a stake in its life insurance subsidiary.

Net interest income rose 16% to ₹26,642 crore, India’s largest lender said on Friday. Non interest income climbed 18% to ₹9,497 crore.

“We have delivered a strong performance despite the difficult circumstances,” chairman Rajnish Kumar said. “As of today, things are fine but we can not tell anything about the future. We are monitoring the situation. Loan sanctions and disbursements are showing an upward trend. There is enough liquidity in the bank to lend,” he added.

“Major challenges for the bank would arise from extended working capital cycle and waning cash flows,” SBI said in a filing to exchanges.

The sale of a small stake in SBI Life yielded a one-off gain of ₹1,539.73 crore.

Loan loss provision decreased 19% to ₹9,420 crore.

The bank made a COVID-19-related provision of ₹3,000 crore during the quarter, Mr. Kumar said.

Total deposits grew 16% to ₹34,19,363 crore in April-June period as credit rose 6.6% to ₹23,85,639 crore.

Gross NPAs declined 23% to ₹1,29,661 crore, while net NPAs decreased 35% to ₹42,704 crore.

Net NPA ratio at 1.86% eased 121 basis points (bps) from 3.07% in the year-earlier period. Gross NPA ratio at 5.44% slid 209 bps.

“SBI delivered a sturdy show at the core characterised by robust NII [net interest income] growth, resilient fee performance, restricted cost growth and prudent utilisation of higher operating and treasury income towards augmenting provision coverage,” said Rajiv Mehta, lead analyst, institutional equities, Yes Securities.

‘Lend some comfort’

“Improved disbursement activity from June in retail segment, about 90% of term loan customers having paid two or more EMIs and negligible SMA1/2 exposure lend some comfort on future outcomes,” Mr. Mehta added.

Provision coverage ratio improved 698 bps to 86.3%.

Slippages eased 77% to ₹3,637 crore. Capital adequacy improved 51 bps to 13.4%.

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