SBI Q3 net jumps 62% on higher interest income

State Bank of India (SBI) reported a 62 per cent year-on-year (yoy) jump in the third quarter standalone net profit at ₹8,432 crore on the back of an increase in the net interest income (NII) and a decline in provisions and contingencies.

India’s largest bank also reported an improvement in business and asset quality parameters. SBI had posted a net profit of ₹5,196 crore in the year ago quarter.

“Though we made additional provision of about ₹1,700 crore as a prudent measure, the net profit for the quarter increased 62 per cent on y-o-y basis,” Dinesh Kumar Khara, Chairman, said in an earnings call.

Other income dips

NII (difference between interest earned and interest expended) of SBI was up about 6 per cent y-o-y to ₹30,687crore (₹28,819.50crore in the year ago quarter).

‘Other income’, including profit/loss on sale of assets, profit/loss on revaluation of investments (net), earnings from foreign exchange and derivative transactions, recoveries from accounts previously written off, dividend income, etc., declined about 6 per cent y-o-y to ₹8,673 crore (₹9,246crore).

Provisions and contingencies declined about 33 per cent y-o-y to ₹6,974 crore (₹10,342 crore). Under this head, loan loss provisions, however, rose 35 per cent to ₹3,096 crore (₹2,290 crore).

Khara emphasised that the bank has created sufficient contingency provisions against the restructured book to insulate its balance-sheet from future shocks arising from uncertainties in this book.

During the reporting quarter, gross non-performing assets (GNPAs) declined ₹3,913 crore to ₹1,20,029 crore as at December-end 2021. Net slippages during the quarter totalled ₹2,334 crore, with a slippage ratio of 0.37 per cent.

NPA position better

The GNPA position improved to 4.50 per cent of gross advances as at December-end 2021 against 4.90 per cent in the preceding quarter.

The Net NPA position too improved to 1.34 per cent of net advances against 1.52 per cent in the preceding quarter.

The SBI chief noted that the bank’s long-term strategy of maintaining asset quality through quality credit underwriting, using analytics for early warning signals, and focus on collections have started delivering consistent results.

As at December-end 2021, total advances increased about 8.47 per cent y-o-y to ₹26,64,602 crore. Total deposits were up 9 per cent y-o-y to ₹38,47,794 crore.

Khara said the bank has untilised loan sanctions pipeline of about ₹4 lakh crore, split almost equally between working capital and term loans, and the same is getting drawn down. Covid rejig book

SBI’s total restructuring book under Covid resolution plan 1 and 2 stood at ₹32,895 crore, which is only 1.20 per cent of its loan book.

“We have also made additional provisions against the restructured accounts over and above the regulatory requirement,” the SBI Chief said.

Published on


February 05, 2022