India’s biggest lender State Bank of India reported a jump of 62.27% year on year (YoY) in the third quarter (Q3) of the financial year 2021-22 (FY22) to Rs 8,432 crores–highest-ever quarterly figure, the bank said. SBI reported a net profit of Rs 5,196 crore in the corresponding period last year.
“Bank has registered its highest quarterly Net Profit of Rs. 8,432 crores in Q3FY22. This represents an increase of 62.27% YoY,” the state-run bank said in a regulatory filing on Saturday.
It is to be noted that most banks reported robust earnings in Q3FY22, as Covid-19 restrictions were eased at the fag end of the year.
SBI Chairman Dinesh Khara attributed the stellar performance to improving interest income, and better provisioning.
“We have a decent interest income. Treasury income has been a bit of an issue but nevertheless, in the other income we have seen a good trend and also lower provisions because of the better asset quality,” said Khara in a press meet.
He further added that the bank has built sufficient contingency provisions against the restructured book to insulate the balance sheet from any future shocks arising out of uncertainties.
The public lender made an additional provision of Rs 1,700 crore during the quarter.
SBI’s Net Interest Income (NII) during the quarter under review increased by 6.48% YoY. Domestic Net Interest Margins (NIMs) for Q3 were 3.40%, increasing by 6 basis points (100 basis points=1%) on a yearly basis.
The bank’s operating profit increased by 6.86% YoY to Rs 18,522 crores in Q3FY22 from Rs 17,333 crores in Q3FY21.
Total deposits grew at 8.83% YoY while saving bank deposits grew by 10.30% on a yearly basis and current account deposits increased by 7.89% YoY.
In another encouraging sign, the Gross Non Performing Assets (NPA) ratio stood at 4.50% is down by 94 bps on a yearly basis while the net NPA ratio was at 1.34%, down by 47 bps YoY, taking into consideration proforma NPAs as on Dec 20.
“On an unadjusted basis, Gross NPA ratio is down by 27 bps YoY while Net NPA ratio is up by 11 bps YoY,” the bank said.
“We don’t have any challenge on the asset quality front. We have adequately insulated our balance sheet from any future shocks also,” Khara further said.
Slippage ratio during the quarter 0.37% and credit cost stood at 0.49%.
Fresh slippages in Q3 were reported at Rs 2,334 crore. Recovery and upgradation for the period were at Rs 2,306 crore as against Rs 5,657 crore in Q2FY21.
“While the elevated level of slippages in the first quarter of the year was due to the exceptional circumstances, we have been able to pull back a significant amount of those slippages which indicate that our long-term strategy for maintaining asset quality through quality credit underwriting using analytics for early warning signals and focus on collections have now started delivering consistent results,” Khara added.
