 "SBI")
State Bank of India (SBI), the country's largest lender, reported a net profit of Rs 9,164 crore in the October-December quarter (Q3FY24), down 35.5 per cent from Rs 14,205 crore in the same period of the previous year (Q3FY23), due to a Rs 7,100 crore provision for pension liabilities.
Sequentially, the public sector lender’s profit was down by 36.05 per cent from Rs 14,330 crore in the quarter ended September (Q2FY24).
Dinesh Khara, chairman, SBI said the one- time provisions (pension of Rs 5,400 crore, dearness allowance of Rs 1,700 crore) impacted the profitability in the third quarter. Bank expects to plough-back Rs 40,000 crore in profits in Fy24.
Sequentially, the public sector lender’s profit was down by 36.05 per cent from Rs 14,330 crore in the quarter ended September (Q2FY24).
Dinesh Khara, chairman, SBI said the one- time provisions (pension of Rs 5,400 crore, dearness allowance of Rs 1,700 crore) impacted the profitability in the third quarter. Bank expects to plough-back Rs 40,000 crore in profits in Fy24.
The Mumbai-based bank’s Net Interest Income (NII) expanded by 4.59 per cent to Rs 39,816 crore in Q3FY24, compared to Rs 38,069 crore in the same quarter a year ago. Sequentially, NII rose by just 0.80 per cent from Rs 39,500 crore in Q2FY24.
Net interest margin (NIM) declined to 3.34 per cent in Q3FY24, compared to 3.69 per cent in Q3FY23. Sequentially, NIM was up\down from 3.43 per cent in Q2FY24. SBI is guiding NIM to be around three basis points plus\minus around current NIM (3.34 per cent per cent), Khara said in a media call after announcement of results.
Its loan loss provisions rose by 10.75 per cent to Rs 1,757 crore in Q3FY24 from Rs 1,586 crore in Q3FY23. However, they declined from Rs 1,815 crore in Q2FY24.
The provision coverage ratio, including technical write-offs, stood at 91.49 per cent in December as against 91.52 per cent a year ago.
SBI’s advances grew 14.38 per cent Y-o-Y to Rs 35.84 trillion in Q3FY24. The bank expects to grow its loan book by 14-16 per cent in the current financial year. The credit growth has been broad-based with retail personal advances growing at 15.28 per cent and corporate advances 10.71 per cent. There is a corporate loan pipeline of Rs 4.6 trillion, chairman said.
Total deposits increased 13.02 per cent Y-o-Y to Rs 47.62 trillion. The share of low-cost deposits – current account and saving account (Casa) – in domestic books declined to 41.18 per cent at the end of December from 44.48 per cent a year ago. Sequentially, they fell 41.88 per cent in September 2023. Bank would like to keep Casa level at 41-42 per cent level, Khara said.
The bank's gross Non-Performing Asset (NPA) ratio was 2.42 per cent at the end of December, improved by 72 basis points Y-o-Y. The net NPA ratio was at 0.64 per cent, improved by 13 basis points Y-o-Y. The provision coverage rate fell from 76.12 per cent in December 2022 to 74.17 per cent in December 2023.
The Capital Adequacy Ratio (CAR) at the end of the third quarter of the financial year 2024 stands at 13.05 per cent, compared to 14.28 per cent at the end of September.
On Friday, its stock had closed 0.39 per cent up at Rs 650.4 per share on BSE. Its Capital adequacy ratio stood at 13.05 per cent with Common Tier I Capital of 10.58 per cent at the end of December 2023. The capital impact of hike in risk weights on unsecured consumer loans and exposure to non-banking finance companies was about 70 basis points.
Bank is comfortably placed in terms of capital to finance Rs 7.0 trillion of loans. As long as credit growth is 14-15 per cent and Return on equity (ROE) in 19 per cent, the gap of five cent will give adequate capital for growth. “Nevertheless, the bank is open to raising equity capital if it so warrants”, Khara said.
On query regards impact of regulatory action on Paytm Payments Bank, Khara said SBI was open to support merchants including those of Paytm which is facing regulatory curbs, by giving POS terminals and opening accounts to avoid disruptions.
Early this week, Reserve Bank of India (RBI) barred Paytm Payments Bank from accepting fresh deposits and carrying out transactions from February 29 this year, citing “persistent non-compliance” and “material supervisory concerns”. In March 2022, the regulator barred Paytm Payments Bank from taking in new customers.
