The independent net profit for the September quarter (Q2FY21) of the State Bank of India (SBI) increased 52 percent year-on-year to Rs 4,574.16 crore as the lender’s provisions decreased during the quarter. In comparison, it had made a net profit of Rs 3,011.7 crore during the corresponding quarter of fiscal 20.
On a quarterly basis, profit increased 9 percent from the profit of Rs 4,189.3 crore reported in the first quarter of fiscal 21.
Given the uncertainty amid the Covid-19 pandemic, analysts had varying estimates for the bank’s earnings. Edelweiss Securities, for example, had set the profit at Rs 2,117.2 crore, while those of ICICI Securities saw the PAT at Rs 4,676.5 crore. READ THE EXPECTATIONS OF THE ANALYSTS HERE
Profit before tax (PBT) for the bank stood at Rs 6,341.45 crore for the quarter under review, an increase of 25.33 percent from the Rs 5,059.8 crore recorded in the prior year quarter. . It advanced 14.3 percent from Rs 5,546.1 crore on a quarterly basis.
The Mumbai-based bank’s operating profit increased nearly 12 percent to Rs 16,460 crore in the second quarter of fiscal year 21 from Rs 14,714 crore recorded in the second quarter of fiscal 2020.
The lender’s net interest income (NII), the difference between interest earned on loans and interest paid on deposits, amounted to Rs 28,182 crore compared to Rs 24,600 crore in the second quarter of 2020. Sequentially, it recorded a 5.7 percent improvement from reported revenue of Rs 26,641 crore in the June quarter of fiscal 21.
The National Net Interest Margin (NIM) improved to 3.34 percent in Q2FY21, registering an increase of 12 bps YoY.
Asset quality
The bank’s Gross Non-performing Assets (GNPA) fell to Rs 1.25 trillion during the recently ended quarter, down from Rs 1.29 trillion in the first quarter of fiscal 21.
In terms of proportion, GNPA’s proportion improved 16 basis points to 5.28 percent from 5.44 percent in the June quarter.
Meanwhile, the net NPA decreased to Rs 36,450.7 crore from Rs 42,703.6 crore sequentially. The proportion dropped to 1.59 percent from 1.86 percent.
During the September quarter, the bank allocated provisions worth Rs 10,118 million, down 23 percent year-on-year from the Rs 13,138.9 million booked in the second quarter of 2020. Of this, provisions for NPA were Rs 5,619.28 crore, down from Rs 11,040.72 crore YoY. Sequentially, provisions fell 19.06 percent from Rs 12,501.3 crore.
The provision coverage ratio (PCR) has improved to 88.19%, an increase of 696 bp year-on-year and 187 bp quarterly.
The bank reported new slippages of Rs 2,756 crore during the quarter, down from Rs 3,637 crore in Q1FY21 and Rs 8,805 crore in Q2FY20.
Moratorium and restructuring
According to the bank’s financial status, the lender has extended the default to loans worth Rs 8.21 trillion as of August 31, 2020. Additionally, it has reclassified loans worth Rs 11,357.78 million as of September 30, 2020.
“Additional provisions made during the quarter were 239 million rupees compared to 1,836 million rupees reserved in the first quarter of fiscal year 21,” it said in a statement.
The bank received requests for loan restructuring worth Rs 6,495 million in October 2020. Provisions on such loans amount to Rs 650 million.
Loan book
The bank’s credit growth recorded a 6.02% improvement over the previous year, mainly driven by retail advances (14.55% year-on-year), agricultural advances (4.19% year-on-year) and corporate advances (2.82% year-on-year). ). Total advances at the end of the second quarter were 23.83 trillion rupees, up from 22.48 trillion rupees in the second quarter of 2020 and 23.85 trillion rupees in the first quarter of 21.
“With the year-on-year growth in corporate / CP bonds of Rs 54,980 crore, the loan portfolio has grown 7.97% year-on-year. Apart from that, mortgage loans, which make up 23% of banks’ domestic advances, they have increased 10.34% year-on-year “it said.
Meanwhile, total deposits grew 14.41 percent annually to 34.70 trillion rupees, of which current account deposits grew 8.55 percent year-on-year, while savings bank deposits grew by 16.28 percent year-on-year.
Stock reaction
The lender’s share price hit a low of Rs 198.1 per share after the result, but rallied 5.5 percent to hit a high of Rs 209 each on the BSE. By comparison, the S&P BSE Sensex was up 380 points or about 1 percent at 3:05 p.m.
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