State Bank of India (SBI), India’s largest lender, reported its highest-ever quarterly profit in the second quarter. The bank’s net profit increased 74% year on year for the quarter that ended on September 30, as core income increased and bad loan provisions decreased as the non-performing assets (NPA) ratio dropped.
SBI standalone profit jumps 74 per cent to Rs 13,265 crore in the second quarter of FY23 as against Rs 7,627 crore a year ago
— Press Trust of India (@PTI_News) November 5, 2022
The net profit for the quarter was Rs 13,265 crore, up from Rs 7,627 crore the previous year. Net profit more than doubled from quarter to quarter. The recorded profit is way higher than Bloomberg’s estimates of Rs 10,262.
In Q2 of FY23 (year-on-year)
— Nirmala Sitharaman (@nsitharaman) November 7, 2022
✅ SBI reports 74 % jump in profit to Rs 13,265 cr
✅ Canara Bank reports 89% jump in profit to Rs 2,525 cr
✅ UCO Bank reports 145% jump in profit to Rs 504 cr
✅ Bank of Baroda reports 58.70% profit of Rs 3,312.42 cr (2/2) pic.twitter.com/YiaspDnhws
The productive increase in quarterly profit was attributed to solid interest income growth due to a drastic increase in credit expansion. Net interest income (NII) or core income increased 13% year on year at Rs 35,183 crore due to a strong 20% increase in credit growth, nearly 200 basis points (bps) higher than the industry average.
Loan growth was pushed by both retail and corporate segments, with corporate loan growth outpacing retail loan growth (19%) by 21% year-on-year, led by the home loans portfolio surged 14.57% year-on-year, at Rs 5.94 lakh crore as of September 30.
SBI’s provisions fell 25% year on year to Rs 2,011 crore in Q2FY23, owing to improved asset quality, with the net non-performing asset (NPA) ratio falling to less than 1%.
According to Dinesh Khara, chairman of the State Bank of India, global economic activity is witnessing a slowdown with inflation higher in developed markets than in developing market economies. Despite these uncertainties, the Indian economy has proven to be resilient.
“Aggregate demand indicators show that the start of the holiday season and pent-up demand kept the growth impulses very strong,” he said.
SBI is witnessing corporate credit demand from infrastructure, renewable energy, and oil marketing companies. Non-bank finance companies are driving demand in the services sector, according to Dinesh Khara.
Khara also predicted a 14 to 16% increase in credit growth by the end of the year.
“Based on current trends, we will most likely see credit growth of 14-16% by the end of the year,” Khara stated.
