State Bank of India (SBI), the country’s largest lender, reported a sharp 55.3 percent rise in net profit for the first quarter of current fiscal at Rs 6,504 crore as compared to Rs 4,189.3 crore.
The bank posted a net interest income (NII) of Rs 27,638 crore in Q1FY22, registering a growth of 3.7 percent from Rs 26,641.6 crore, YoY.
Domestic net interest margin (NIM) for Q1FY22 at 3.15 percent, declined by 9 bps YoY.
The bank's net profit was above the street expectations, as a CNBC-TV18 analysts' poll had estimated profit at Rs 6,374.5 crore for the quarter, while NII was 4.3 percent lower than the estimates.
The bank's operating profit during the quarter increased by 5.06 percent to Rs 18,975 crore from Rs 18,061 crore, YoY. The operating profit excluding exceptional items increased by 14.85 percent.
SBI’s asset quality in the April-June 2021 quarter weakened as gross non-performing assets (NPA) increased to 1.34 lakh crore from Rs 1.26 lakh crore and net NPA spiked 17.2 percent to Rs 43,152 crore from Rs 36,810 crore, QoQ.
Gross NPA as a percentage of gross advances rose by 34 bps to 5.32 percent from 4.98 percent and net NPA as a percentage of net advances increased by 27 bps to 1.77 percent from 1.50 percent, sequentially.
Provision Coverage Ratio (PCR) was at 85.93 percent, down 39 bps YoY.
The bank's provisions in Q1FY22 were at Rs 10,052 crore versus Rs 11,051 crore, QoQ and versus Rs 12,501 crore, YoY.
Provisions for NPA in the June 2021 quarter declined to Rs 5,029.8 crore from Rs 9,914.2 crore in the March 2021 quarter and from Rs 9,420 crore in the June 2020 quarter.
Fresh slippages in Q1 were at Rs 15,666 crore, while the gross slippages were at Rs 16,298 crore.
The slippage ratio for Q1FY22 stood at 2.47 percent from 0.60 percent at the end of Q1FY21. Credit cost at the end of Q1FY22 had declined 77 bps YoY to 0.79 percent.
Total deposits grew at 8.82 percent YoY. Current account deposits grew by 11.75 percent YoY and saving bank deposits grew by 10.55 percent YoY.
SBI's total deposits grew at 8.82 percent YoY. Current Account Deposits grew by 11.75 percent and Saving Bank Deposits grew by 10.55 percent YoY, the bank said.
Domestic Credit Growth stood at 5.64 percent mainly driven by Retail (Personal) Advances (16.47% YoY), Agri Advances (2.48% YoY) and SME (2.01% YoY).
Capital adequacy ratio (CAR) improved by 26 bps YoY to 13.66 percent as on Jun 2021 – without including Q1FY22 profit, the bank said.
Krishnan ASV of HDFC Securities believes that SBI’s higher gross NPAs were not a cause to worry because every bank has been reporting 30-40 bps rise in NPAs.
“Given the environment we are in, April and May were tough months there is no reason to believe SBI was immune to that. The write off are close to about Rs 3500 crore, the restructured portfolio is about Rs 5500 crore. Generally, it is well contained, you cannot be completely immune in this environment. So given the circumstances, I think SBI has managed the portfolio far better than we could give them credit for,” Krishnan said.
The stock price of SBI hit a 52-week high of Rs 467.30 apiece on the BSE after the announcement of Q1 results. The stock finally ended 2.37 percent higher at Rs 457.05.