SBI Q1 Results: Profit Jumps 55% On Lower Provisions, Higher Other Income
India’s largest lender saw its quarterly profit rise as provisions dropped and other income rose.
Net profit of State Bank of India stood at Rs 6,504 crore in the April-June period, an increase of 55.2% over the year earlier, according to its exchange filing. That compares with the Rs 5,398-crore consensus estimate of analysts tracked by Bloomberg.
The bank’s net interest income, or core income, rose 3.7% year-on-year to Rs 27,638 crore, against an estimated Rs 28,804 crore. The bank's other income rose 48% to Rs 11,803 crore.
"We saw Rs 1,692 crore worth recovery from the Kingfisher Airlines account during the quarter. This has helped boost the other income," said Dinesh Khara, chairman of SBI.
SBI’s asset quality weakened with gross non-performing asset ratio at 5.32% compared with 4.98% as of March. Net NPA ratio rose 27 basis points sequentially to 1.77%.
The bank reported slippages worth Rs 15,666 crore during the reported period compared with Rs 3,637 crore a year ago and Rs 21,934 crore as of March.
Small and medium enterprises added Rs 6,416 crore worth of slippages.
Retail loans added Rs 5,268 crore worth of slippages during the quarter.
Retail slippages largely came from the home loan and personal loan portfolio
Recoveries and upgrades stood at Rs 7,774 crore in Q1.
Loans where repayments were overdue between 60 and 90 days stood at Rs 3,326 crore in the April-June period, compared with Rs 6,843 crore a year ago.
"Around 50% of our home loan book is to non-salaried customers which belong to the SME segment," Khara told reporters. "The slippages are largely because of the disruption in the SME segment."
From 1.39% in June, the gross NPA ratio for the home loan portfolio has fallen to 1.14% in July, owing to higher recoveries and restructuring of stressed accounts, Khara said.
As on June 30, the bank restructured loans worth Rs 12,931 crore, which included retail loans worth Rs 2,977 crore and corporate loans worth Rs 9,954 crore. SBI held provisions worth Rs 1,949 crore against these loans.
Under the extended one-time restructuring scheme announced by the regulator on June 4, SBI has already received applications for restructuring of loans worth Rs 7,400 crore.
Total provisions during the quarter fell 19.6% year-on-year to Rs 10,052 crore.
Gross advances for the bank rose 5.79% year-on-year to Rs 25.24 lakh crore. Total deposits rose 8.8% to Rs 37.2 lakh crore.
Domestic retail loans rose 16.5% year-on-year to Rs 8.72 lakh crore.
The bank's home loan book rose 11% from a year ago to more than Rs 5 lakh crore.
Low-cost current account savings account deposits grew 11% year-on-year to Rs 16.59 lakh crore, with CASA ratio at 45.97% of total deposits.
Term deposits rose 8% from a year ago to Rs 19.5 lakh crore.
"We're expecting a credit growth of 9% during this financial year. The under-utilisation of credit lines by borrowers in our mid-corporate clients group has dropped to 25%," Khara said. "That's a positive."
Khara, in an interview with BloombergQuint, said the bank's borrowers had under-utilised credit lines worth Rs 2.5 lakh crore and fresh proposals for Rs 1.32 lakh crore were in the pipeline, ensuring strong credit growth in the corporate book. "We are seeing that when it comes to the government sector which is supporting road and construction, there we are seeing some traction. These proposals which we are talking of are coming from there."
Shares of SBI rose as much as 4.69% to a record high of Rs 467.45 apiece as of 2:21 p.m. on Wednesday after the results. That compares with a 0.92% gain in the benchmark Nifty 50.
Watch the full interview here: