State Bank of India, the country's largest public sector lender, on Friday, posted a 41% year-on-year increase in its net profit for the quarter ended December (Q3). Profit during the quarter rose to ₹5,583 crore, the highest quarterly profit reported by the bank, from ₹3954.41 crore a year ago due to an improvement in asset quality.
SBI reported a marked improvement in asset quality, as gross non-performing asset (NPA) reduced to 6.94% from 8.71% and net NPA declined to 2.65% from 3.95% over a year. Provision coverage ratio increased to 81.73% from 74.63% in the year-ago period.
Slippages during the quarter stood at ₹16,525 crore compared to ₹8,805 crore in the previous quarter, and ₹4,523 crore a year ago.
The lender reported an exposure of ₹7,000 crore to a large housing finance company, which was included in slippages.
The bank reported an increase of 87% in recoveries and upgrades to ₹13,553 crore from the previous quarter. This was largely aided by the resolution of the Essar Steel account.
The jump in profit was supported by a 22% rise in net interest income that stood at ₹27,779 crore during the quarter. Operating profit was ₹18,223 crore, an increase of 44% from the year-ago period. The bank’s net interest margin improved to 3.59% from 2,97% in the corresponding quarter last year.
Corporate advances declined by 0.5% to ₹7,71,000 crore over a year, while retail loans grew 17.5% to ₹7,19,766 crore. Credit cost reduced to 1.46% from 2.70% in the third quarter of the previous financial year.
CASA ( current account and savings account) deposits improved 8.34% to ₹13,40,830 crore; term deposits grew 10.5% to ₹16,57,367 crore and CASA ratio decreased over 50 basis points (bps_ to 44.72% on a y-o-y basis.bps to 44.72% on a y-o-y basis.
In the December quarter, SBI said its capital adequacy ratio improved by 96 bps to 13.73% from 12.77% during the same period last year.
Shares of State Bank of India on Friday ended 2.03% higher at ₹317.26 on the BSE, while the benchmark BSE Sensex closed 0.52% lower at 40,699.48 points.