Driven by a fall in provisions and growth in NII (net interest income), the State Bank of India (SBI) reported a net profit of Rs 3,955 crore for the third quarter (Q3) of 2018-19. In the previous quarter (September 2018), the largest public sector lender in the country had posted a loss of Rs 2,416.4 crore, accounting for a sequentially increase in net profit massively by 318.5 percent.
For the December 2018 ended quarter, the bank's NII rose by 21.4 percent to Rs 22,691 crore from a year before. Loan growth was seen at 12.1 percent on a year-on-year basis and 4.6 percent on a quarter-on-quarter basis. Lower slippages and lower funding cost helped in the growth of NII.
SBI said the domestic net interest margin expanded to 2.97 percent for December 2018 when compared to 2.92 percent in the previous quarter driven by higher credit growth, better spreads and lower slippages.
The lender's asset quality improved. Gross non-performing assets (NPA) as a percentage of gross advances fell to 8.71 percent for the third quarter from 9.95 percent in September 2018. Net NPAs as a percentage of net advances were also lowered at 3.95 percent for the quarter as against 4.84 percent in the previous quarter.
Provisions and contingencies saw a sharp drop at Rs 6,006 crore in the December-ended quarter when compared to Rs 12,092 crore in the quarter before and Rs 18,876 crore in December 2017.
However, provisions for NPAs grew sharply higher at Rs 13,971 crore for the quarter under review as against Rs 10,184.5 crore in the second quarter but declined when compared to the Rs 17,759.7 crore reported a year ago.