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State Bank of India, the country’s largest lender, has more than doubled its profit for the March quarter, beating Street estimates and sending its stock to a 52-week high.
The State-run banking behemoth posted a standalone net profit of ₹2,815 crore, a 123 per cent jump over last year’ Q4 figures of ₹1,264 crore.
SBI’s scrip registered a high of ₹314.90 during trading on Friday, before closing at ₹308.15, a 1.72 per cent increase over Thursday’s close.
Interest earned during the quarter climbed 10 per cent to ₹47,393 crore. Net interest income (NII) rose 17 per cent, to ₹18,071 crore.
The healthy growth in NII (the difference between interest income and expenses) was aided by a similar 7 per cent growth in advances and only a marginal decline in net interest margin.
Other income was somewhat stagnant and greater control on costs — employee costs went down — led to ₹16,026 crore of operating profit, a near-13 per cent growth.
SBI has provided for the merger costs with associate banks, bank Chairman Arundhati Bhattacharya said.
For the full fiscal, standalone net profit stood at ₹10,484 crore.
“We had a very difficult but satisfying quarter. In respect of the merger of the associates, we have taken the maximum of the pain so that going forward we have better results. Their (associate banks) corporate books have been fully aligned with ours and the basic expenses of the merger have been taken care of,” she said.
Asset quality SBI’s numbers have been better than the market estimate, said Siddharth Purohit, Senior Research Analyst, Angel Broking.
“There is positive development, especially on the asset quality front. However, the stock has moved up reacting positively to the result,” he told BusinessLine .
Gross bad loans, as a percentage of total loans, fell sequentially to 6.9 per cent in the January-to-March quarter. In the October-to-December period, it was 7.23 per cent. SBI alone accounts nearly a fifth of the country’s total banking assets.
For the full year, however, gross non performing assets (NPAs) per cent increased to 6.90 from 6.50.
In absolute terms, gross NPAs rose 14 per cent, year-on-year, to ₹1,12,343 crore (₹98,173 crore).
Net NPAs during the fiscal stood at ₹58,277 crore.
NPA break-up Exposure in the large- and mid-corporate portfolio continuing to turn bad remained a worry for the lender. Of a ₹3,41,990 crore exposure in the large corporate portfolio, about 10 per cent — or ₹33,070 crore — was reported as NPAs as on March 2017, the investor presentation uploaded by SBI said.
On a comparative basis, NPAs in the large corporate lending rose 60 per cent on a year-on-year basis.
Meanwhile, the SBI informed the BSE that it has declared an annual dividend of ₹2.60 per share (260 per cent) for FY17.
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