SBI Q3 result: Net profit soars 69% YoY to Rs 14,205 crore, beats estimates

SBI Q3 result: The profit number beat Street estimate. Consensus estimates by Bloomberg had projected net profit at Rs 13,196 crore

SBI Q3 result: India's biggest government-owned lender, State Bank of India (SBI), reported a 68.5 per cent year-on-year surge in net profit for the October-December quarter of financial year 2023 (Q3FY23). The bank reported standalone net profit of Rs 14,205 crore in Q3FY23, its highest ever in a quarter, as against net profit of Rs 8,432 crore in Q3FY22.

On a quarter-on-quarter basis, the profit rose 7 per cent from PAT of Rs 13,265 crore reported in the September quarter of this financial year. Operating profit for Q3FY23 was at Rs 25,219 crores, up 36.16 per cent YoY.

On the bourses, shares of SBI settled 3 per cent higher on the BSE at Rs 544 as against a 1.5 per cent gain in the benchmark S&P BSE Sensex.

The number beat Street estimate. Consensus estimates by Bloomberg had projected net profit at Rs 13,196 crore.

Meanwhile, SBI's net interest income, or the difference between interest income earned and interest expended, stood at Rs 38,069 crore. This was 24 per cent higher than NII of Rs 30,687 crore of last year. NII in Q2FY23 was Rs 35,183 crore.

Net interest margin for the lender increased by 29 bps YoY to 3.69 per cent. 

The lender's credit book saw a smart rise of 17.60 per cent on year to Rs 31.33 trillion, with domestic advances growing by 16.91 per cent YoY to Rs 20.49 trillion.

"SBI's total exposure to Adani group is 0.9 per cent of overall loan book. As of now, we don't envisage any challenge from the group to meet debt obligations. There are no lending against shares to the conglomerate," Dinesh Khara, chairman, SBI said.

SBI said domestic advances growth was driven by retail personal loans, which stood at Rs 11/24 trillion, up 18.10 per cent YoY, followed by corporate loans (Rs 9.25 trillion, up 18.08 per cent YoY). 

Deposits, meanwhile, rose by 9.5 per cent on year, and 0.56 per cent quarter-on-quarter, to stand at Rs 42.13 trillion. State Bank said domestic CASA were Rs 18 trillion, while domestic term deposit were Rs 22.47 trillion.

Asset quality
The lender's gross non performing asset (NPA) ratio fell 136 bps YoY to 3.14 per cent for the quarter, while net NPA was 57 bps down to 0.77 per cent. 

In absolute terms, gross NPAs fell 18 per cent on year to Rs 98,347 crore, and net NPAs declined 32 per cent to Rs 23,484 crore in the quarter. 

"The Covid-19 pandemic across the globe resulted in decline in economic activities and movement in financial markets. ln this situation, Bank geared up to meet the challenges, and has been evaluating the situation on an ongoing basis and had proactively provided against the challenges of likely stress on the Bank's assets. Bank's management is not expecting any significant impact on bank's liquidity or profitability," SBI said.

Slippage Ratio for Q3FY23 stood at 0.41 per cent; credit cost improved by 28 bps YoY to 0.21 per cent; and Capital Adequacy Ratio (CAR) at the end of Q3FY23 stands at 13.27 per cent.