Shares of State Bank of India (SBI) on Friday fell 2.4% to an intra-day low of ₹292.2 after the country's largest bank reported a standalone profit of ₹838.40 crore in the quarter ended March 2019; an analysts poll had estimated SBI's profit will be in excess of ₹4,000 crore. It had posted a loss of ₹7,718.2 crore in the corresponding period last year.

However, the SBI stock soon rebounded to an intra-day high of ₹310.7 —a 3.8% jump from the previous day closing price and over 6% higher than the intra-day low. Reason: Like the devil's in the detail. SBI non-performing assets (NPAs) showed a steady decline. Gross and net NPAs as percentage of advances reduced to 7.53% and 3.01% at the end of March quarter, from 10.91% and 5.73%, respectively, a year ago; from 8.71% and 3.95%, respectively, in the previous quarter ended December 2018.

And if numbers were not enough to boost investor sentiments, SBI Chairman Rajnish Kumar got vocal and said that balance sheet of the bank has been fully repaired. The bank’s standalone total income grew 10.6% to ₹75,670.50 crore at the end of March quarter 2019 from ₹68,436.06 crore in the March 2018 quarter; sequentially, standalone total income increased 7.6% from ₹70,311.84 crore in the previous quarter.

On the profit front, there was a 78.8% decline—from ₹3,954.81 crore in the previous quarter to ₹838.40 crore in the March 2019 quarter.

On an annual basis, standalone total income rose 7.1% to ₹2,78,083 crore in FY19 from ₹2,59,664 crore in FY18. Consolidated total income also grew over 9.5% to ₹3,30,221 crore from ₹3,01,491 crore in FY18.

The bank posted an annual standalone profit of ₹862.23 crore in FY19 compared to a net loss of ₹6,547.45 crore in FY18. And, SBI’s consolidated profit stood at ₹3,069.07 crore in FY19, compared to a net loss of ₹4,187.41 crore in FY18.

In the quarter ended March 2019, the bank made NPA provision of ₹17,336 crore, compared with ₹24,080 crore a year ago—nearly 28% lower; but 24.09% higher than ₹13,971 crore in the December 2018 quarter. SBI’s standalone NPA provisioning at ₹54,529 crore was 22.9% lower than ₹70,680.24 crore in FY18. On the consolidated front, provisioning fell 22.8% from ₹71,525.99 crore in FY18 to ₹55,253.57 crore in FY19.

Both gross and net NPAs showed signs of improvement. From ₹223,427.50 crore in March 2018, gross NPAs fell 22.7% to ₹172,750.40 crore in March 2019; on a sequential basis, the fall was 8%—from ₹187,764.60 crore in the December 2018 quarter. Similarly, SBI’s net NPAs fell 40.6% from ₹110,854.70 crore in the March 2018 quarter to ₹65,894.74 crore in the March 2019 quarter. Compared to ₹80,943.51 crore in the December 2018 quarter, the sequential decline was 18.6%.

Analysts are already building a positive view on the public sector behemoth, which witnessed a near 14% growth in domestic advances, wherein retail saw an 18.5% growth and lending to high-rated corporates saw a 14.8% annual growth. SBI’s home loan portfolio crossed the ₹4,00,000 crore mark in March 2019.

On the BSE exchange, the SBI stock on Friday closed 2.94% higher at ₹308.05. At the current market price, the stock has recovered 29.5% from its 52-week low price of ₹237.85 on May 18 last year. This is another reason for analysts, after SBI’s reported fall in NPAs, to now increase their target prices for the banking behemoth.

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