The bank had posted a standalone net profit of Rs 3,241.08 crore in the year-ago period.
On a consolidated basis, the bank's net profit increased 3.4 per cent to Rs 4,448.15 crore for the quarter ended June 30, against Rs 4,298.56 crore in the year-ago period.
Total income on a standalone basis increased to Rs 40,739.21 crore during the quarter, against Rs 36,192.62 crore in the year-ago period, the bank said in a BSE filing.
Provision for bad loans increased to Rs 3,903.41 crore as against Rs 2,265.83 crore a year earlier, registering an increase of 72 per cent.
The bank's gross non-performing assets (NPAs) declined to 4.90 per cent of total advances at the end of June, against 5.56 per cent a year-ago.
"Profitability pressures will continue if the economy doesn't pick up. We need the economy to move up to ensure profitability pressure comes down," SBI Chairperson Arundhati Bhattacharya said.
During the quarter, the net interest income increased 15.12 per cent to Rs 13,252 crore as against Rs 11,512 crore in the April-June period of last fiscal.
On a blended level (domestic and international put together), the net interest margin of SBI slightly fell to 3.13 per cent from 3.16 per cent on account of a dip in international margin which stood at 1.08 per cent, down from 1.49 per cent in June last year. However, the domestic NIM improved to 3.54 per cent from 3.44 per cent.
Bhattacharya said the drop in international margins is due to of non-utilisation of the USD 1.25 billion funds which it raised through medium term note issue in April.
On improved asset quality, Bhattacharya said, "Asset quality has a direct impact on profitability and if your asset quality improves it means good for profitability."
Shares of SBI today closed down by 0.9 per cent at Rs 2,415.25 apiece on the BSE.
Total NPAs in the agriculture portfolio stood Rs 1,224 crore in the period.
During Q1, fresh slippages stood at Rs 9,932 crore against Rs 13,766 crore in the year-ago period. The proposed farm loan waiver in Andhra Pradesh and Telangana had an impact on the bank's fresh slippages.
Fresh slippages in agriculture portfolio stood at Rs 1,959 crore in the quarter under review. The bank sold Rs 5,566 crore to asset reconstruction companies (ARCs) in the quarter. For the first time in its history, SBI had sold Rs 3,700 crore worth NPAs to ARCs in the fourth quarter of the past fiscal.
The bank's loan recovery stood at Rs 3,185 crore and it upgraded Rs 1,362 crore of loans. It wrote off Rs 6,556 crore of loans in the quarter.
During Q1, SBI restructured Rs 5,700 crore of advances, including standard assets and NPAs, while the recast pipeline stands at around Rs 3,500 crore at present.
Provision coverage ratio stood at 62.68 per cent.
The bank has estimated a provision requirement with respect to unhedged foreign currency exposure of Rs 343.24 crore for the full year and during the quarter it made a provision of Rs 85.81 crore.
Deposits grew 12.85 per cent to Rs 14,18,915 crore in Q1 from Rs 12,57,389 crore in the same period last year.
Advances increased to Rs 12,32,288 crore, up 12.52 per cent from Rs 10,95,145 crore a year ago.
The bank said credit off-take is a bit tepid at present but maintained the growth target of 15 per cent.
On fund raising plans, Bhattacharya said SBI is well capitalised and will think of it when credit growth picks up.
She said even though the bank does not immediately require an infusion, it is in discussions with the government on multiple options of capital raising, including a rights issues, institutional placement of shares or a follow on public offer.
She said the bank is not looking at an infrastructure bonds as of now even though it has a headroom to raise Rs 30,000 crore from the instrument.
On the long-pending plan to merge one of its associate banks, Bhattacharya declined to give any indication on the capital required and added that the bank will firm up plans in the next three months.
In the Budget, the Government had sounded positive about consolidation in the banking space and Financial Services Secretary GS Sandhu had said the process will kick-start with a merger within the SBI Group this fiscal.
Net profit of the five associate banks of SBI declined to Rs 702 crore from Rs 837 crore, a fall of 16.09 per cent on an annual basis.
The associates are State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Mysore and State Bank of Hyderabad.
Among these, State Bank of Bikaner and Jaipur, State Bank of Mysore and State Bank of Travancore are listed entities.
SBI Life reported a net profit of Rs 241 crore in Q1, while MF arm gave in Rs 39 crore and the i-banking unit SBI Caps chipped in with Rs 55 crore.
Another subsidiary, SBI Cards & Payment Services, posted 70 per cent increase in net profit at Rs 114 crore in the June quarter from Rs 67 crore in the year-ago period.