SBI Q2 Net Profit Jumps 67%; Shares Touch 52-Week High

State Bank of India (SBI), India's largest lender, today reported a standalone second-quarter net profit of Rs 7,626 crore, up 67 percent from the previous year. This compares to 4,574 crores in the same quarter the previous year.

SBI shares traded at Rs 528, up 1.26% on NSE. It touched an intra-day high of Rs 542 per piece during the trade.

The stock returned 82.83 percent over three years, compared to 68.61 percent for the Nifty 100. Over a three-year period, the stock returned 82.83 percent, while the Nifty Bank provided investors a 55.51 percent return.

On September 30, the bank's gross non-performing asset ratio was 4.9 percent, down from 5.32 percent in June. The net NPA ratio dropped 25 basis points from the previous quarter to 1.52 percent.

The sharp increase in net profit in the September quarter was due to a drop in provisioning for bad loans and an improvement in asset quality.
SBI's results exceeded expectations, with analysts polled by Reuters expecting a net profit of 7,182 crore.

Provisioning for bad loans at the Mumbai-based lender fell 46% sequentially to 2,699 crore from 5,030 crore the previous quarter. Its yearly provisions have more than halved from 5,619 crore.

The difference between interest collected on loans and interest expenditure on deposits, or net interest revenue, of State Bank of India increased by 11% to 31,184 crore from 28,181 crore.

In the September quarter, SBI's asset quality improved, with gross non-performing assets as a proportion of total advances falling to 4.90 percent from 5.32 percent the previous quarter. Its gross non-performing assets (NPAs) totaled 1.23 lakh crore.

Domestic retail advances (15.17 percent YoY) and overseas office advances drove the Bank's advances up 6.17 percent in the third quarter over the previous year (16.18 percent YoY).

Meanwhile, throughout the time period under consideration, domestic advances grew at a rate of 4.61 percent. Home loans, which account for 24% of the Bank's domestic advances, have increased by 10.74 percent year over year.

In the second quarter, SBI's provision coverage ratio (PCR) was 87.68 percent, while the slippage ratio was only 0.66 percent, down from 2.47 percent in the previous June quarter.