Country’s largest lender SBI on Tuesday reported a 5.97 per cent rise in its consolidated net profit at Rs4,714 crore in the quarter to June, helped by lower bad loan provisioning and healthy rise in other income.
On standalone basis, net profit rose by a higher 10.25 per cent at Rs3,692 crore, driven by a robust jump in treasury and investment income that rose 19.66 per cent to Rs5,088 crore, out of which fee income contributed Rs3,202 crore, up 12.86 per cent.
SBI Chairperson Arundhati Bhattacharya sounded optimistic on the asset quality front, saying the worst is sort of behind the bank.“Overall, the stress picture is much better and with some amount of confidence I can say the recovery is having a beneficial impact in the books,” she told reporters while announcing the numbers.
While loan loss provisions fell by 14 per cent to Rs3,359 crore from Rs3,903 crore last year, total provisions increased marginally by 1.31 per cent to Rs5,510 crore from Rs5,439 crore in the year-ago period, she said.
Chief financial officer and deputy MD Anshula Kant attributed the good set of numbers to “the growth in net interest income which rose 3.6 per cent, other income has gone up by 20 per cent and also as on lower loan loss provisions.”
Explaining the improvement in the asset quality, the chairperson said, “on a year-on year basis the slippages have come down. Now, we need to understand what is the quality of slippages. For the first time, we are seeing mid-corporate slippages very much under control. Main slippages that have occurred during the quarter is mainly in the retail area”.
Kant said domestic net interest margin (NIM) declined to 3.29 per cent from 3.54 per cent due to reduction in base rate by 30 basis points, and also because of subdued loan growth of 5.38 per cent system level NIM came down by 14 bps to 2.99 per centThe core profitability gauge net interest income (NII) ofSBI inched up to Rs13,732 crore from Rs13,252 crore a year ago during the reporting quarter.
However, at over Rs1,850 crore, treasury income alone contributed close to 50 per cent of the standalone bottomline as the bank parked more funds in government bonds, the ratio of which rose to 28 per cent.
The bank saw its asset quality improving in the quarter with gross non-performing assets coming down by 61 basis points at 4.29 per cent from 4.90 per cent last year, while net NPAs came down by 42 basis points to 2.24 per cent. Fresh slippages came down massively to Rs7,318 crore from Rs9,932 crore in the same quarter last year.