SBI Q3 net profit rises 62% to ₹8,432 crore, slippages zoom

State Bank of India’s (SBI) net profit for the third quarter ended December rose 62.327% to ₹8,432 crore on account of an increase in interest income and lower provisioning due to better asset quality. It was SBI’s highest quarterly profit, Chairman Dinesh Khara said.

“Overall, it is a good performance in the quarter. We expect the performance to improve further [in the fourth quarter]. There has been improvement in utilisation of limits by corporates. Going forward, we see decent growth in corporate credit,” Mr. Khara said in a virtual press conference.

“By making additional provisioning we have insulated our book. This is to address the stress seen on the horizon,” he added.

‘Third-wave provisions’

The bank made additional provisions of ₹1,700 crore to deal with any incremental stress on account of impact from the third wave of the pandemic. The bank reported 6.48% growth in net interest income to ₹30,687 crore. It made loan-loss provisions of ₹3,096 crore as against ₹2,290 crore, an increase of 35.218%. Net interest margin for the quarter was 3.4% compared with 3.34% a year earlier, the bank said in a filing.

Slippages surged by 84.7% to ₹2,334 crore as compared to ₹237 crore a year ago. Gross non-performing assets expanded 2.37% to ₹1,20,029 crore while net NPAs rose 19% to ₹34,540 crore.

Advances grew 8.47%. Domestic advances growth of 6.47% was driven by a rise in personal retail advances (14.657%). Foreign office advances expanded 21.435%. Home loans, which constitute 24% of SBI’s domestic advances, climbed 11.215%. Growth in the corporate and SME segments also picked up during the quarter. Total deposits grew 8.83%.

The capital adequacy ratio (CAR) at the end of December stood at 13.23%, the lender said. The return on assets increased 19 basis points to 0.64%, SBI added.