State Bank of India Q4 profit jumps 80 per cent on higher interest income, lower provisioning
State Bank of India (SBI) on Friday topped Street estimates as it reported an 80.15 per cent rise in net profit for the quarter ended March 2021 following a drop in provisions even as its core income showed a good growth.
The country’s largest lender posted a net profit of Rs 6,451 crore against Rs 3,581 crore in the same period of the previous year. Analysts were expecting the bank to post a net profit of around Rs 6,000 crore during the period.
The growth in the bank’s bottomline was supported by an almost 19 per cent rise in the net interest income (NII) to Rs 27,067 crore from Rs 22,767 crore in the year-ago period.
Another positive element was the improvement in the bank’s asset quality. The gross NPA ratio fell to 4.98 per cent from 6.15 per cent and net NPA stood at 1.15 per cent against 2.23 per cent a year ago. In absolute terms, the gross bad loans came down to Rs 1,26,389.02 crore from Rs 1,49,091.85 crore in the fourth quarter of the previous fiscal.
The bank’s loan loss provision declined 16.64 per cent to Rs 9,914 crore from Rs 11,894 crore in the corresponding quarter of the previous fiscal.
SBI chairman Dinesh Khara told reporters that while there could be some stress on account of the second wave of Covid-19, the bank did not see any major asset quality problems so far.
SBI said that during the period, domestic credit growth stood at 5.67 per cent over the same period last year, mainly driven by retail advances which grew 16.47 per cent. SME lending rose 4.24 per cent, while agricultural advances were up 3.92 per cent.
According to the bank, its loan book has grown 6.53 per cent over the year-ago period, including the growth in corporate bonds or commercial paper of Rs 51,811 crore. In the retail segment, home loans showed a growth of 10.51 per cent over the previous year.
The board has recommended a dividend of Rs 4 per share for the financial year ended March 2021. The total payout will be Rs 3,569 crore.
SBI shares ended with gains of 4.30 per cent to close at Rs 401.10 on the BSE on Friday.