State Bank of India reported a 41 per cent year-on-year (y-o-y) jump in fourth quarter standalone net profit at ₹9,114 crore against ₹6,451 crore in the year ago quarter on sharp decline in bad loan provisions and healthy growth in net interest income (NII).

This is the highest quarterly net profit posted by India’s largest bank. The public sector bank’s net profit shot up 55 per cent to ₹31,676 crore (₹20,410 crore in FY21).

The Board declared a dividend of ₹7.10 per equity share (710 per cent) for the financial year ended March 31, 2022.

Dinesh Kumar Khara, Chairman, observed that the bank has delivered reasonably good outcomes in terms of business, profitability, and asset quality parameters.

“We have also created sufficient contingency provisions against the restructured book to insulate our balance sheet from any future shock,” he said, adding that the bank continues its focus on improving income streams with control on costs.

In the reporting quarter, NII (difference between interest earned and interest expended) was up 15 per cent at ₹31,198 crore (₹27,067 crore).

Khara said NII was up on the back of a pick-up in credit offtake in all segments and improvement in asset quality.

Non-interest income, comprising fee-based income, trading income, recovery in written-off accounts, and others, declined about 27 per cent to ₹11,880 crore (₹16,225 crore). Standard asset provisions declined to Rs 419 crore (Rs 2,259 crore).

Provisions towards non-performing assets (NPAs) declined 67 per cent y-o-y to ₹3,262 crore (₹9,914 crore).

Gross NPAs declined to 3.97 per cent of gross advances as at March-end 2022 against 4.98 per cent as at March-end 2021. Net NPAs declined to 1.02 per cent against 1.50 per cent.

On the restructuring front, SBI’s total exposure under the Covid restructuring plan -- 1.0 and 2.0 -- stood at Rs 30,960 crore, which is just 1.1 per cent of its loan book.

Total deposits increased by 10.06 per cent yoy to stand at Rs 40,51,534 crore as at March-end 2022. Gross advances were up 11 per cent yoy to stand at Rs 28,18,671 crore..

Referring to the return on equity (ROE) moving up by 398 basis points yoy to 13.92 per cent, Khara said: “We have charted a trajectory to move towards ROE of 15 per cent before 2024.”

Whole bank net interest margin (NIM) improved to 3.15 per cent in the reporting quarter against 2.90 per cent in the year-ago quarter.

Khara emphasised that in a rising interest rate scenario, banks normally have the an advantage because loans get repriced from time to time, but when it comes to deposits, they always go up with a lag.

“So, I think, I expect this to have positive impact on NIMs, going forward,” he said.