State Bank of India reported a 67 per cent year-on-year surge in net profit for the July-September quarter to 7,627 crore, its highest ever, sending its shares up over 1 per cent. In the year-ago quarter, the country’s largest lender had reported a net profit of Rs 4,574 crore.
A 52 per cent decline in provisions for non-performing assets to Rs 2,699 crore from Rs 5,619 crore, helped drive the profit growth.
SBI’s net interest income also rose near 11 per cent from a year ago to Rs 31,184 crore, versus Rs 28,181 crore.
SBI's shares closed up 1.7 per cent on Wednesday at Rs 530.65. The BSE Sensex ended down 0.4 per cent or 257 points to 59,771.92 points.
The state-owned lender has also reported a slight decline in its non-performing assets. Gross NPAs in the September quarter stood at 4.90 per cent, down from 5.32 per cent in June quarter and 5.28 per cent in the year-ago quarter. Similarly, net NPAs came in at 1.52 per cent in the second quarter, compared with 1.77 per cent in June and 1.59 per cent a year ago.
This in line with trends across the banking system. Data of 23 banks (nine state-owned and 14 private sector) shows gross NPAs have declined from 8.01 per cent in June 2020 to 6.97 per cent in September 2021, indicating a gradual improvement in NPAs, according to CARE Ratings.
It must be noted that the lender incurred an exceptional item in the July-September quarter as it provided for the entire additional liability of Rs 7,418.39 crore following the revision in family pension payable to employees of the bank.
On the credit front, it's a mixed picture; retail loans continue to gain traction, but corporate borrowing remains muted. Total gross advances at SBI rose 6.2 per cent to Rs 25.31 lakh crore. But, even as retail personal loans surged 15 per cent, corporate advances de-grew 4 per cent from a year ago.
Dinesh Khara, the chairman of SBI, remains hopeful that the lender will be able to achieve a double-digit credit growth by the end of the current financial year.
“As far as our overall advances growth is concerned, it stands about 6 per cent plus. We would certainly like to see it growing up to 10 per cent. But, much of it would be the function of real economy also. We are hopeful, we track these early signs, we should be in a position to achieve this 10 per cent growth,” he said.
Retail loans are expected to continue growing at a faster clip, while there has been some decent demand from the corporate side this month, too, added Khara.
Meanwhile, SBI’s deposits grew close to 10 per cent to Rs 38.09 lakh crore from Rs 34.70 lakh crore a year ago. While domestic term deposits rose 8 per cent YoY, its CASA (current account and savings account) deposits were up close to 12 per cent.
HDFC Bank, the country’s largest private sector lender, had last month reported an 18 per cent rise in its quarterly profit at Rs 8,834 crore. Rival ICICI Bank too had reported a record profit in the second quarter. Its standalone net profit was up 30 per cent from a year ago to Rs 5,511 crore.
