 "Treasury gains, fee income help State Bank of India Q4 net surge 24%")
State Bank of India (SBI) on Thursday reported 24 per cent year-on-year (Y-o-Y) growth in net profits at Rs 20,698 crore in the fourth quarter of 2023-24 (Q4 FY24), aided predominantly by treasury gains and fee income.
The country’s largest lender’s record quarterly profits beat the Bloomberg consensus estimate of Rs 13,450 crore.
Sequentially, net profits rose by 125.9 per cent from Rs 9,164 crore in Q3FY24.
For the full financial year, SBI posted record net profits of Rs 61,077 crore in FY24, showing 21.6 per cent Y-o-Y growth.
Its board recommended a dividend of Rs 13.70 per share for FY24. It had declared a dividend of Rs 11.30 per share in FY23.
Its stock closed 1.14 per cent higher at Rs 819.55 on the BSE.
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Net interest income (NII) for the reporting quarter grew 3.13 per cent Y-o-Y to Rs 41,655 crore. Sequentially, NII grew 4.62 per cent.
Referring to lower growth in NII, Dinesh Khara, chairman, said there was a time lag for the impact of changes in interest rates. He said deposit costs had plateaued and there would be re-pricing of the loan book.
The lender’s net interest margin (NIM) -- the difference between interest received and interest paid -- from domestic operations in Q4FY24 fell to 3.47 per cent, down from the 3.84 per cent in the same period the previous year.
The NIM in the third quarter was 3.34 per cent. The bank expects to maintain this level (of NIM) this financial year (FY25), Khara said in the post-results media conference.
Other income, comprising fees, commission, and treasury earnings, expanded by 24.4 per cent to Rs 17,369 crore in Q4FY24 from Rs 13,961 crore in Q4FY23. Treasury gains increased by 92.36 per cent to Rs 3,463 crore in Q4.
Besides treasury gains, fees from loan applications and cross-selling and foreign exchange also boosted the non-interest income, he said.
The cost-income ratio fell to 49.34 per cent (excluding wage revisions and one-time items) on March 31, 2024, from 52.49 per cent.
Loan-loss provisioning increased sharply to Rs 3,294 crore in Q4, up 157.65 per cent Y-o-Y. These provisions are made based on assessment on a particular day and the bank has recovered Rs 800 crore from non-performing assets, Khara said.
SBI reported credit growth of 15.24 per cent Y-o-Y at Rs 37.67 trillion as of March 31, 2023. Of this, domestic advances grew by 16.26 per cent.
Retail personal advances and corporate loans registered Y-o-Y growth of 14.68 per cent and 16.17 per cent, respectively. Home loans grew 13.29 per cent.