SBI net profit zooms 28% on better asset quality, credit growth

MUMBAI: The State Bank of India (SBI) has reported a 28 percent on-year growth in net profit at Rs 18,331 crore for the quarter to September driven by improved asset quality and higher credit sales. The nation’s largest lender had posted Rs 14,330 crore in net profit in the year-ago period.

The new chairman CS Setty, who assumed office only last month, said that in the reporting quarter, the bank earned an interest income of Rs 1.14 trillion, up 12.32 percent on-year, while net interest income grew at a lower pace of 5.37 percent on-year to Rs 41,620 crore from Rs 39,500 crore in the year-ago period.

The interest income grew lower because the net interest margin (NIM) came down by 15 basis points (bps) on-year and 8 bps on a quarterly basis to 3.14 percent from 3.22 percent in the quarter-ago period and 3.29 percent in the year-ago period.

Of this, domestic NIM declined to 3.27 percent from 3.35 percent in the June quarter and 3.43 percent in the year-ago period. But the chairman said the NIM has stabilized and that he does not see any further fall, indicating that there will not be any more increase in deposit rates.

On the asset quality side, the bank that controls nearly a quarter of the systemwide assets saw all-round improvement with gross NPAs improving to 2.13 percent from 2.21 percent in June 2024, and from 2.55 percent in September 2023, while net NPAs declining to 0.53 percent from 0.57 percent in June 2024, and from 0.64 percent in September 2023.

In absolute terms, the gross non-performing assets came down by 4.14 percent in the second quarter to Rs 83,369 crore from Rs 84,226 crore in the quarter-ago period and Rs 86,974 crore in the year-ago period. Similarly, net NPAs declined by 4.96 percent on a yearly basis to Rs 20,294 crore from Rs 21,555 crore in the year-ago period and Rs 21,352 crore sequentially.

The provision coverage ratio improved by 21 bps to 75.66 and the slippage ratio improved by 2 bps on-year to 0.68 percent. The slippage ratio for the reporting period increased by 5 bps on-year and stands at 0.51 percent.