SBI Q1: Net profit jumps 55.25% to Rs 6,504 crore on lower provisioning
Country’s largest lender SBI on Wednesday reported a 55.25 per cent jump in standalone profit after tax at Rs 6,504 crore for the quarter ended June, helped by lower provisioning for bad loans and higher non-interest income. The lender’s standalone profit after tax stood at Rs 4,189 crore in the same quarter of the previous fiscal.
On a consolidated basis, profit after tax stood at Rs 7,539.22 crore as against Rs 5,203.49 crore in the year-ago quarter.
“The bank has performed well on most of the parameters. As far as the net profit is concerned, the number was around Rs 6,500 crore which is a year-on-year growth of 55.25 per cent and the highest quarterly profit. SBI Chairman Dinesh Khara told reporters, “Bank since 2008. With regard to asset quality also, I am satisfied with the result.”
Net interest income (NII) grew by 3.74 per cent to Rs 27,638 crore as against Rs 26,642 crore in Q1 FY21. Non-interest income grew 24.28 per cent to Rs 11,803 crore from Rs 9,497 crore. Domestic net interest margin declined 9 basis points to 3.15 per cent from 3.24 per cent. Gross Non-Performing Assets (GNPA) increased from 5.44 per cent to 5.32 per cent. Net NPAs also declined to 1.77 per cent from 1.86 per cent. The latest slippage in the quarter stood at Rs 15,666 crore.
“There has been a slippage because of the lockdown. I think once the economic activity returns, we will also be in a position to reverse the slippage,” he said.
Khara said the slippage has come from the small and medium enterprises (SMEs) and home loan segments. He added that the SME sector is a bit sticky, but the bank is seeing better traction for the restructuring coming from this sector.
Under the Reserve Bank of India’s Resolution Framework 2.0, the bank has received restructuring requests of Rs 7,300 crore. Of these, requests for Rs 1,400 crore have come from the SME sector and it has already restructured loans worth about Rs 1,100 crore.
In all, the bank has implemented resolution plan in respect of 52,052 borrowers amounting to Rs 5,246 crore under Resolution Framework 2.0.
Recovery and Upgradation stood at Rs 4,969 crore. The lender expects to recover Rs 14,000-15,000 crore during the current financial year.
Khara said the bank recovered Rs 1,692 crore related to Kingfisher Airlines during the first quarter.
When asked about the tension in the telecom sector, a senior bank official said there is no tension at the moment. “There is one particular account where the exposure is big and there we are following very closely. We are all concerned about it, but overall teleworking is fine,” he said without naming the account.
Khara also said that the bank will take all possible steps to ensure that the balance sheet remains untouched by any possible threat to the telecom sector.
The total provisioning declined by 5.88 per cent to Rs 12,471 crore. Loan loss provision declined 46.61 per cent to Rs 5,030 crore from Rs 9,420 crore in the year-ago quarter.
Domestic credit growth stood at 5.64 per cent, mainly driven by retail (personal) advances (16.47 per cent), agricultural advances (2.48 per cent) and SMEs (2.01 per cent).
“When it comes to credit growth, we have seen our commercial clients (mid-corporate) see an improvement in utilization in FY22. We are seeing an improvement in activity in certain sectors like iron and steel. It happened,” said Khara. . He said that the bank has corporate loans sanctioned (term loan and project finance) of Rs 2 lakh crore and loan proposals of another Rs 1 lakh crore are in process.
The bank’s stock closed at Rs 457.05, up 2.37 per cent on the BSE.
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