State Bank of India (SBI) on Friday reported a 28% year-on-year (y-o-y) growth in standalone profit to Rs 18,331 crore in the September quarter, beating by a wide margin Bloomberg’s estimates of Rs 16,112 crore. However, the bank’s net interest margin (NIM) contracted by 16 basis points to 3.27% — partly due to higher provisions, double from a year ago.
The bank has also received approval from the board to raise long-term bonds worth up to Rs 20,000 crore through a public issue or private placement during FY25.
Shares of SBI ended 1.86% lower at Rs 843.25 on the BSE.
At the end of the September quarter, the gross advances rose 14.93% y-o-y to Rs 39.2 lakh crore, while the deposit growth was much lower at 9.13% y-o-y at Rs 51.17 lakh crore — a new milestone, said chairman CS Setty in the post-earnings conference.
He added that the domestic credit-to-deposit ratio was at 67.8% and the bank will focus on increasing the share of CASA.
Credit costs rose by 16 bps y-o-y to 0.38%, compared with 0.22% a year ago. The state-owned lender registered robust credit growth across all segments. Growth in domestic advances was driven by an 18.35% jump in corporate advances, a 17.67% rise in agri-loans, another 17.36% in small and medium enterprises and 12.32% in retail segments.
Setty also added that the bank has a strong corporate loan pipeline of Rs 6 lakh crore. He expects a 14-16% growth in loans and a double-digit growth in deposits.
SBI’s infrastructure loans jumped 8.86% in the July-September quarter, and it currently has over Rs 4 lakh crore of outstanding loans in this sector. It expects more demand for such credit. “We have a significant infrastructure book, and there is a good amount of interest from investors for this particular instrument (infrastructure bonds),” Setty added.
As far as stress buildup in the microfinance segment is concerned, he said that the bank has a miniscule book in terms of overall advance. On the asset quality front, gross non-performing asset (NPA) improved to 2.13% from 2.21% in June, while net NPA stood at 0.53%, compared to 0.57% in the previous quarters. The capital adequacy ratio (CAR) stood at 13.76%, with a CET-1 ratio of 9.95% and a tier-1 ratio of 11.32%.
The bank has registered a firm growth in its digital business. Around 61% of the savings accounts were opened through YONO – the bank’s mobile app. Around 81 million customers with YONO.
Sharing branch expansion plans, Setty said the board has approved a plan to open 600 branches in the current financial year. Of this, around 550 have already been approved and notices have been given to circle management. Of the total, 135 are already operational.