State Bank of India (SBI), the country’s largest lender, beat expectations with a 25 per cent year-on-year rise in standalone net profit at Rs 3,879.07 crore for the quarter ended September 30, 2015 (Q2) as against forecasts of Rs 3,639 crore. After the announcement of Q2 result, shares of SBI jumped over 3 per cent to Rs 241.55 in the afternoon trade (at 2.13 pm). Analysts on average had expected the lender to report a net profit of Rs 3,639 crore, according to data compiled by Thomson Reuters.
According to KR Choksey shares & Securities, Q2FY16 stood out a strong quarter for SBI reporting growth with quality. The improvement in asset quality on the back of prudent accelerated provisioning and rich liability franchise with increased focus now on digital banking has helped the bank to deliver improved return ratios.
Top 5 key takeaways from SBI’s Q2 results:
Net Profit: For the quarter ended September 30, 2015, SBI posted standalone net profit of Rs 3,879.07 crore against Rs 3,100.41 crore in the same quarter last year. The bank reported a consolidated net profit at Rs 4,991.70 crore for the said quarter compared with Rs 4,023.84 crore in the year-ago period.
Total Income: Standalone total income increased to Rs 46,854.81 crore during the quarter under review as against Rs 41,833.36 crore a year earlier. On a consolidated basis, total income jumped to Rs 66,585.85 crore for the second quarter, from Rs 61,098.67 crore in the same period last year.
Asset quality: The biggest positive for the quarter was improvement in asset quality with gross non-performing assets (NPAs) moving down to 4.2 per cent as against 4.9 per cent a year ago. Net NPAs stood down at 2.1 per cent v/s 2.7 per cent a year ago.
Net Interest Income (NII) and Net Interest margin (NIM): NII of the bank grew 7.4 per cent YoY and 3.8 per cent QoQ. NIMs for the quarter stood stable at 3 per cent owing to improvement in cost of funds. Non-interest income came in better than expected at Rs 6,200 crore, up 35.6 per cent Y-o-Y and 21.8 per cent Q-o-Q on the back of healthy treasury gains during the quarter.
Growth: SBI business growth stood tall with both advances and deposits surging as much as 11 per cent YoY during Q2FY16.