SBI Q1: Net profit jumps 55.25% to Rs 6,504 crore on lower provisioning
The country's largest lender SBI on Wednesday reported a 55.25 per cent jump in standalone profit after tax at Rs 6,504 crore for the quarter ended June, helped by lower provisioning for bad loans and higher non-interest income. The lender's standalone profit after tax stood at Rs 4,189 crore in the same quarter of the previous fiscal.
On a consolidated basis, the profit after tax stood at Rs 7,539.22 crore, as against Rs 5,203.49 crore in the year-ago quarter.
"The bank has done well on most of the parameters. As far as the net profit is concerned, the number was around Rs 6,500 crore which is an increase of 55. 25 per cent on a y-o-y basis and is the highest quarterly profit posted by the bank ever since the year 2008. In respect of asset quality also, I am satisfied with the outcome," SBI Chairman Dinesh Khara told reporters.
Net interest income (NII) grew by 3.74 per cent to Rs 27,638 crore as against Rs 26,642 crore in Q1 FY21. Non-interest income rose by 24.28 per cent to Rs 11,803 crore from Rs 9,497 crore. Domestic net interest margin declined by 9 basis points to 3.15 per cent from 3.24 per cent. Gross non-performing assets (GNPA) improved to 5.32 per cent from 5.44 per cent. Net NPA also declined to 1.77 per cent from 1.86 per cent. Fresh slippages in the quarter stood at Rs 15,666 crore.
"Slippages have come on account of the lockdowns. I think once the economic activity comes back, we will also be in a position to pull back the slippages," he said.
Khara said slippages came in from the small and medium enterprises (SMEs) and the home loan segments. He noted that the SME sector is little sticky, but the bank is seeing better traction for the restructurings that are coming from the sector.
Under the Reserve Bank of India's Resolution Framework 2.0, the bank has received restructuring requests of Rs 7,300 crore. Of these, Rs 1,400 crore of requests have come from the SME sector and it has already restructured around Rs 1,100 crore of loans.
Overall, the bank has implemented resolution plan in respect of 52,052 borrowers amounting to Rs 5,246 crore under the Resolution Framework 2.0.
Recoveries and upgradation stood at Rs 4,969 crore. The lender expects recoveries of Rs 14,000-15,000 crore during the current financial year.
Khara said during the first quarter, the bank recovered Rs 1,692 crore of dues related to Kingfisher Airlines.
Asked about the stress in the telecom sector, a senior executive of the bank said there was no stress at present. "There is one particular account where the exposure is large and there we are following up very very closely. All of us are concerned about it, but by and large the telecom is okay," he said, without naming the account.
Khara also said the bank will take all possible steps to ensure that the balance sheet is insulated from any kind of potential threat in the telecom sector.
Total provisions declined by 5.88 per cent to Rs 12,471 crore. Loan loss provisions were down by 46.61 per cent to Rs 5,030 crore from Rs 9,420 crore in the year-ago quarter.
Domestic credit growth stood at 5.64 per cent, mainly driven by retail (personal) advances (16.47 per cent), agri advances (2.48 per cent) and SME (2.01 per cent).
"When it comes to credit growth, we have seen that our commercial clients (mid-corporates) are seeing improvement in utilisations in FY22. We are seeing that in certain sectors like iron and steel, there is an improvement in activities," Khara said. The bank has corporate loan sanctions (term loans and project finance) of Rs 2 lakh crore and another Rs 1 lakh crore worth of loan proposals are under process, he added.
The bank's scrip closed at Rs 457.05 apiece, up 2.37 per cent on BSE.
