State Bank of India (SBI) reported the highest standalone quarterly net profit at ₹6,504 crore in the first quarter ended June 30, 2021, on the back of healthy growth in ‘other incomes’ and a decline in loan loss provisioning.

The net profit of India’s largest bank jumped 55 per cent over the year-ago period’s ₹4,189 crore.

Net Interest Income (the difference between interest earned and expended) nudged up about 4 per cent YoY to ₹27,638 crore (₹26,642 crore in the year-ago period).

Total non-interest income, including fee income, profit/loss on sale of investments, forex income and miscellaneous income, rose 24 per cent YoY at ₹11,803 crore (₹9,497 crore).

SBI recovered ₹1,692 crore from the defunct Kingfisher Airlines. Loan loss provisions were 47 per cent lower YoY at ₹5,030 crore (₹9,420 crore). However, the bank upped standard assets provision to ₹1,578 crore (₹282 crore).

SME/retail lead slippage

Fresh slippages were higher at ₹15,666 crore (₹3,637 crore in the year-ago quarter). But they were lower over vis-a-vis the preceding quarter’s ₹21,934 crore. SMEs accounted for 41 per cent of fresh slippages, followed by retail loans (34 per cent), agriculture (19 per cent) and corporate (6 per cent).

SBI Chairman Dinesh Kumar Khara said that in the last one-and-a-half months there has been a significant pull back (about ₹4,700 crore) in slippages which happened in the April-June quarter. The slippages were mainly on account of non-salaried and MSME borrowers getting impacted by Covid second wave.

Now, another tool for SBI to resolve stress

He emphasised that the endeavour is to contain the slippage ratio within 2 per cent of loans in FY22. The slippage ratio rose to 2.47 per cent in the first quarter against 0.60 per cent in the year-ago quarter.

SBI restructured loans aggregating ₹12,995 crore under the RBI’s Resolution Framework 1.0 for Covid-19 related stress (covering personal and corporate loans) and ₹5,246 crore under the Resolution Framework 2.0 for Covid-19 related stress (covering individuals and small businesses).

The gross non-performing assets (GNPAs) increased by ₹7,870 crore during the reporting quarter to ₹1,34,259 crore as of June-end. The GNPA position improved to 5.32 per cent of gross advances against 5.44 per cent in the year-ago quarter. However, GNPAs increased 34 basis points over the preceding quarter.

The net NPA position, too, improved to 1.77 per cent of net advances against 1.86 per cent. However, NNPAs increased by 27 basis points over the preceding quarter.

Loan book to grow

Khara expects the overall loan book to grow about 9 per cent YoY in FY22. He said the bank has a ₹2-lakh-crore sanctions pipeline. Another ₹1-lakh-crore worth loan proposals are being processed.

Gross advances rose 6 per cent YoY to ₹25,23,793 crore as of June-end. The growth came mainly on the back of retail personal advances and foreign office advances growing 16.47 per cent and 6.68 per cent, respectively. Agriculture and SME advances nudged up 2.48 per cent and 2.01 per cent, respectively. Corporate advances de-grew 2.33 per cent.

Total deposits were up 8.82 per cent YoY to ₹37,20,987 crore. The proportion of low-cost current account, savings account (CASA) deposits improved from 45.34 per cent as at June-end 2020 to 45.97 per cent as of June-end 2021.

SBI reported a 45 per cent YoY increase in consolidated net profit at ₹7,539 crore (₹5,203 crore).

Profits of India Inc improved markedly in FY21: SBI Ecowrap

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