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SBI Q2 profit rises 8% to ₹14,330 crore as NII climbs by 12.3%


State Bank of India (SBI) reported second-quarter standalone net profit grew 8% to ₹14,330 crore, aided by lower bad loan provisions and a 12.3% increase in Net Interest Income (NII) to ₹39,500 crore.

However, the bank’s Net Interest Margin (NIM) eased by 12 basis points (bps) to 3.43% due to an increase in the cost of deposits, SBI Chairman Dinesh Khara said while announcing the results at a briefing.

The lender’s operating profit also declined by 8.07% YoY to ₹19,417 crore.

He said the bank’s loan loss provision shrank by 9.75% YoY to ₹1,815 crore.

The bank reported credit growth of 12.4% with domestic advances increasing by 13.2%.

Domestic advances growth was driven by SME advances (22.8%) followed by retail personal advances which grew by 15.7%. Agri and corporate loans registered growth of 14.8% and 6.62%, respectively. The bank’s deposits grew at 11.9%, out of which CASA deposits grew by 4.91%.

The bank’s asset quality improved as Gross NPA ratio at 2.55% improved by 97 bps. Net NPA ratio at 0.64% improved by 16 bps.

Provision coverage ratio (PCR) at 75.5% declined by 248 bps. Slippage ratio for the quarter increased by 13 bps YoY and stands at 0.46%, Mr. Khara said.

He said the outlook on domestic activities was brightening on account of sustained buoyancy in services, consumer and wages optimism, public spending on infrastructure and underlying strength of financial sector’s balance sheet.

Upbeat outlook

“Consumer confidence has improved with uptick in most of the macroeconomic conditions… growth is expected to get momentum through the rest of the year, especially from impetus spending,” he said, adding “as demand for credit continues, we expect credit and deposit may grow by 16-17% in FY2024.”

On the outlook, Mr. Khara said: “Normally… in the busy season we see an uptick as far as credit growth is concerned. We expect to grow at around 13-14%. We are seeing growth in all the sectors, right from the retail to SME and agriculture.”

Commenting on the rise of unsecured loans at lenders, Mr. Khara said, “I still maintain my stance that our unsecured book is better than the secured loans. Nearly 86% of our unsecured book is given to those who are maintaining salary account with us, and they are all from the government sector”.

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