State Bank of India, the largest commercial bank in the country is stagnating in terms of income growth but recording handsome growth in profits.
SBIís Interest income for the quarter stood at Rs 7,859.56 crore (Rs 7,432.71 crore) up 6 per cent from the year ago period while sequentially it went up by 4 per cent over the June quarter income of Rs 7,535.88 crore.
During the quarter 47 per cent of the total interest income came from treasury operations while 37 per cent from its core financing operations. However, both the interest/discount on advances and bills as well as the investment income went up by 4 per cent on a year-on-year basis to Rs 2,881.83 crore (Rs 2,778.61 crore) and Rs 3,712.60 crore (Rs 3,577.71 crore) respectively.
The interest on balance with RBI and other inter bank deposits which contribute close to 12 per cent to the total interest income have gone up by 21 per cent on a year-on-year basis to Rs 911.87 crore (Rs 755.48 crore) while sequential growth was 8 per cent over the June quarter income of Rs 840.56 crore.
The total interest expended during the quarter stood at Rs 5,449.57 crore (Rs 5,256.24 crore) up 4 per cent on a year-on-year basis while sequentially it went up by 6 per cent over the June quarter cost of Rs 5,120.21 crore. Spread expanded this quarter. At Rs 2,409.99 crore (Rs 2,176.47 crore) it was up by 11 per cent over the previous corresponding quarter.
Other income, the key driver of profitability, was Rs 1,132.83 crore (Rs 1,013.49 crore) up by 12 per cent over the previous corresponding period while sequentially it rose 10 per cent over the June quarter figure of Rs 1,034.50 crore.
Lower rise in operating expenditure (up just 4 per cent) and better other income has improved the operating profit, which at Rs 1,728.56 crore (Rs 1,439.36 crore) was up 20 per cent from the same period last year.
Despite tax provision having gone up by 32 per cent over the year ago period to Rs.452.93 crore (Rs 343.60 crore), reduction in other provisions and contingencies by 3 per cent on a year-on-year basis has enabled it to report a net profit of Rs 835.20 crore (Rs 643.86 crore).
The stock is currently trading at Rs 288 discounting its September quarter annualised EPS of Rs 63.48 by just about five times. It has shot up recently and looks good for another 20 per cent rise for the year.