India’s largest public lender State Bank of India (SBI) beat estimates as it reported a 68 per cent year-on-year jump in fiscal third quarter net profit to a highest ever of Rs 14,205 crore; whereas Net Interest Income (NII) jumped 24 per cent on year to Rs 38,068.8 crore. Earlier, Bloomberg had pegged NII for Oct-Dec quarter at Rs 46,946 crore, and net profit at Rs 13,196 crore. Brokerages had maintained that SBI may report loan growth of 17-19 per cent year-on-year, in line with industry growth, while deposit growth was expected to be around 10 per cent on year which would support NII improvement and margin expansion.
Key operational highlights from SBI’s quarter results
SBI reported the credit growth at 17.60 per cent on year to reach Rs 31,33,565 crore in December quarter from Rs 26,64,602 during the same period last year, with domestic advances growing by 16.91 per cent and foreign advances by 21.47 per cent YoY. “The domestic advances growth was driven by retail personal advances followed by corporate advances,” the company said. Loans to SMEs and agriculture registered a growth of 14.16 per cent and 11.52 per cent respectively on year. The report maintained that Whole Bank Deposits grew at 9.51 per cent YoY to reach Rs 42,13,557 crore this quarter from Rs 38,47,794 crore the last year, wherein CASA Deposit grew by 5.88 per cent.
Further, provisions declined 17 percent to Rs 5,760 crore in the December quarter from Rs 6.974 crore in the same period last year. The capital adequacy ratio as of December 31 stood at 13.27 per cent, compared with 13.51 per cent a quarter ago. The slippage ratio for Q3FY23 stands at 0.41 per cent from the previous 0.37 per cent. The slippage was registered at Rs 3098 crore.
In terms of accounts, the public sector lender maintained that 64 per cent of SB accounts and 41 per cent of retail asset accounts were acquired digitally through YONO, and the share of alternate channels in total transactions increased from 95.3 per cent in 9MFY22 to 97.2 per cent in 9MFY23.
Prior to the results, ICICI Securities had said, “We expect SBI to deliver over 17 per cent RoE aided by growth build-up, contained credit cost and improving margin profile. Absence of treasury knock is likely to support operating profit growth.” Earlier in the previous quarter, State Bank of India (SBI) had reported its highest-ever quarterly profit after tax (PAT) of Rs 13,264.62 crore, up 74 per cent year-on-year (YoY). On Thursday, SBI stock closed 0.90 per cent higher at Rs 532.10 apiece on NSE. Some of the key monitorables include profit and NII, deposit growth, asset quality outlook, loan book traction, slippages.