State Bank of India (SBI) announced on Thursday an 84% year-on-year (y-o-y) rise in its standalone net profit to Rs 16,891 crore in the third quarter of the current financial year. The public sector lender beat street expectations as Bloomberg estimates had pegged the profit at Rs 16,504 crore.

However, the market was disappointed by the numbers because the bank had declared a net profit of Rs 9,164 crore in the third quarter of last year while taking a one-time hit of Rs 7,100 crore on account of higher provisions related to wage and pension liabilities. Taking that into account, the growth in PAT is muted at 3.85%. In the second quarter, the bank reported Rs 18,331-crore profit.

“While we have improved on every parameter, the substantial jump in profit is also because there was a one-time exceptional item in Q3FY24,” SBI chairman CS Setty said. SBI’s shares ended 1.58% lower at Rs 753.95 on Thursday. The net interest income, the difference between interest earned and paid, rose 4% y-o-y to Rs 41,446 crore in the December quarter.

The net interest margin (NIM) of the lender shrunk 19 basis points to 3.15 % from 3.34% in the same quarter of previous year. 

According the management, deposit cost has stabilised and NIM is expected to remain in current range. “Net interest margins are broadly holding up and the cost of deposits is higher because savings account deposits are moving to fixed deposits,” said Setty.

He expects to maintain deposit growth at 10% and loan growth at around 14%-16% in the current financial year.

Gross advances of the bank in the third quarter grew 13.5 % to Rs 40.68 lakh crore, from Rs 35.84 lakh crore in the year-ago period. Domestic corporate advances increased to Rs 11.76 lakh crore in the third quarter from Rs 10.24 lakh crore a year ago while domestic retail personal advances grew by 11.7 % to Rs 14.47 lakh crore.

Deposits increased by around 10% y-o-y to Rs 52.3 lakh crore. Domestic CASA increased by 4.46% to Rs 19.65 lakh crore in the December quarter, from Rs 18.81 lakh crore a year ago. In the second quarter, the domestic CASA stood at Rs 19.66 lakh crore.

The CASA ratio declined to 39.20 % in the third quarter from 40.03 % in the second quarter and 41.18 % in Q3FY24.

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Domestic term deposit has shown a sharp growth of 13.47% y-o-y Rs 30.49 lakh crore in the October-December quarter. 

The lender improved its asset quality as Gross NPA ratio declined to 2.07 % as on December 31, 2024, as against 2.13 % as on September 30, 2024. Slippages, or the proportion of good loans turning bad, declined to Rs 3,823 crore in the third quarter from Rs 4,960 crore in the same quarter previous year. The slippage ratio for Q3FY25 improved by 19 bps year- on-year and stood at 0.39%.