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State Bank of India’s standalone net profit surged 80 per cent year-on-year (yoy) in the fourth quarter at ₹6,451 crore on the back of a dip in loan loss provisioning and a healthy growth in the net interest income.
However, slippages in the reporting period rose sharply. The board of India’s largest bank declared a dividend of ₹4 per equity share (400 per cent) for FY21.
SBI had logged a net profit of ₹3,581 crore in the year ago period.
In the reporting quarter, loan loss provisions declined 17 per cent y-o-y to ₹9,914 crore ( ₹11,894 crore in the year ago period).
The net interest income (the difference between interest earned and expended) was up 19 per cent y-o-y at ₹27,067 crore (₹22,767 crore).
The total non-interest income, comprising , profit/loss on sale of investments, and fee, forex and miscellaneous income (mainly recovery in advances under collection accounts), edged up about 1 per cent to ₹16,225 crore (₹16,077 crore).
Fresh slippages jump
Fresh slippages rose to ₹21,934 crore during the reporting quarter against ₹8,105 crore in the year ago period. SBI said that pursuant to the March Supreme Court order, proforma slippages, which were considered as standard till December 2020, were stamped non-performing assets (NPAs) in the fourth quarter (January-March) FY21, wherever applicable. Dinesh Khara, Chairman, said that the bank’s GNPA to gross advances ratio at 4.98 per cent as at March-end 2021 (against 6.15 per cent as at March-end 2020) is the lowest in five years. “Going forward, we do not see any concern on the asset quality front and we expect this trend to continue,” he added. Net NPAs declined to 1.50 per cent of net advances against 2.23 per cent.
Khara estimated FY22 credit growth at about 10 per cent (about 5 per cent growth in gross advances in FY21) if the second Covid wave subsides by the end of this month.
In FY22, the bank plans to create a ₹10,000-crore Covid-19 loan book by extending credit to entities in the emergency healthcare services ecosystem and extend about ₹10,000 crore in gold loans.
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