SBI Q3 Results: Profit Rises 68.5% On Higher Interest Income, Lower Provisions
SBI's Q3 net interest income rose to Rs 38,068 crore, up 24% from last year.
India's largest lender, State Bank of India, saw its third-quarter profit rise on higher core income and lower provisions against bad loans.
Net profit for the quarter was up 68.5% year-on-year and stood at Rs 14,205 crore. Analysts polled by Bloomberg estimated a net profit of Rs 13,295 crore for the quarter.
Net interest income, or core income, for the bank rose to Rs 38,068 crore, up 24% from last year. Other income rose 34% from a year ago to Rs 11,468 crore.
Asset quality position for the lender improved, with gross non-performing asset ratio falling 38 basis points sequentially to 3.14% as on Dec. 31. The net NPA ratio remained flat at 0.77% at the end of the third quarter.
The bank's slippage ratio during the quarter stood at 0.41% of total loans, compared with 0.33% on Sept. 30.
Total provisions for the quarter fell 17% from a year ago to Rs 5,761 crore during the third quarter. Provisions against bad loans nearly halved to Rs 1,586.47 crore.
Provisions coverage ratio, without taking into account the written-off accounts, stood at 76.12%, compared with 71.22% a year ago.
Business Growth
The lender's gross advances rose 17.6% year-on-year to Rs 31.33 lakh crore. Domestic loan books rose 16.9% from last year. Domestic corporate and retail loan portfolios rose by 18% each.
The bank's deposit book rose 9.5% from last year to Rs 42.13 lakh crore. Low-cost current account savings account deposits were at 44.48% of total deposits, down 126 basis points from a year ago. Domestic term deposits were up 11.38% and rose to Rs 22.47 lakh crore.
Speaking with reporters after announcing the results, SBI Chairman Dinesh Khara said that the lender's exposure to Adani Group companies stood at around Rs 27,000 crore, or 0.8% of the loan book, as on Dec. 31.
The bank has extended loans against genuine assets and SBI does not envisage any issues with Adani Group's repayment capabilities, he said. Since SBI has not extended any loans against shares as collateral, the volatility in the group's shares on the exchanges will not impact the outstanding credit, Khara said.
"There is no acquisition financing or loans against shares in this exposure. The volatility in stock markets will not impact the loans they have availed from us. We do not envisage any challenge in their ability to repay the loans," he said.
As far as projects under implementation are concerned, SBI will only disburse future credit after promoters of any company are able to provide the necessary equity infusion, the SBI chairman said.
Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.