SBI Q2 Results: PAT Climbs 8% YoY To Rs 14,330 Cr On Robust NII Growth By 12%

The country's largest lender State Bank of India (SBI) on Saturday released its financial results for the quarter ended 30th September 2023. The bank said its standalone net profit stood at Rs 14,330 Cr in Q2FY24 up by 8% YoY from Rs 13,264.52 Cr in Q2FY23.

SBI announced a net profit of Rs 16,099.58 crore for the September 2023 quarter on a consolidated basis. In the June 2023 quarter, it posted a consolidated net profit of Rs 18,356 crore, and Rs 14,752 crore in Q2FY23.

Net interest income (NII) for SBI climbed 12.3% to Rs 39,500 crore in Q2FY24 from Rs 35,183.4 crore in the same quarter the previous year.

For the quarter under review, the bank recorded a total income of over Rs. 1.12 lakh crore on a standalone basis, up from Rs. 88,733 crore in the same quarter last year.

According to the bank, its operating profit for Q2FY24 is Rs 19,417 crores, down 8.07 per cent year on year from Rs 21,120 crores in Q2FY23. For the first half of the year, the bank's ROA and ROE were 1.10% and 22.57%, respectively. According to SBI, its ROA for the quarter was 1.01%, down 3bps YoY.

The bank said that its Domestic NIM for H1FY24 rose to 3.45%, a 6bps YoY rise. However, Q2FY24 Domestic NIM dropped 12bps YoY to 3.43%. Concerning asset quality, the bank's Net NPA ratio (0.64%) climbed by 16 bps YoY, while its Gross NPA ratio (2.55%) improved by 97 bps YoY. According to SBI, its PCR (including AUC) jumped by 39 bps year on year to 91.93%. The Provision Coverage Ratio (PCR) dropped by 248 bps YoY to 75.45% during the quarter under review.

Gross non-performing assets (GNPA) of the bank plummeted 4.8% in Q2FY24 from Rs 91,327.84 crore in Q1FY24 to Rs 86,974.08 crore in Q2FY24. SBI's provisions in Q2FY24 were Rs 115.3 crore compared to Rs 3,039 crore in Q2FY23 and Rs 2,501 crore in Q1FY24. For the quarter ended in September 2023, SBI's Pre-Provision Operating Profit (PPoP) fell by 8.07% to Rs 19,417 crore from Rs 21,120 crore in the year-ago quarter.

SBI said in a stock exchange filing that its H1FY24 slippage ratio climbed by 16 basis points YoY to 0.70%. For Q2FY24, the slippage ratio climbed by 13 bps YoY to 0.46%. Its credit cost for Q2FY24 improved by 6 bps YoY to 0.22%.

Regarding the balance sheet, the bank said that its credit growth jumped by 12.39% YoY, its domestic advances increased by 13.21% YoY, and its foreign office advances increased by 8.11% YoY. According to the bank, SME advances contributed 22.75% of the rise in domestic advances year on year, while retail personal advances climbed by 15.68%.

CASA deposits climbed at 4.91% YoY, whereas SBI's whole bank deposits surged by 11.91% YoY during the quarter under review. The CASA ratio as of September 30, 23 was 41.88%. As of the end of Q2FY24, the bank's Capital Adequacy Ratio (CAR) was 14.28%, an improvement of 77bps YoY.

39% of the bank's retail asset accounts and 61% of its SB accounts came about digitally through YONO in Q2FY24. According to the bank, its percentage of transactions through alternate channels climbed from around 96.8% in H1FY23 to approximately 97.7% in H1FY24.

State Bank of India Ltd. Q2FY24 Result First Cut - Surprisingly, NII beats estimates however, net profit misses estimates

• Net Interest Income stood at Rs. 39,500 crores in Q2FY24, showing a marginal improvement of 1.5% QoQ / up 12.3% YoY and surprisingly exceeding the market estimates of Rs. 38,500 crores.
• Pre-provision operating profit (PPOP) sharply declined to Rs. 19,417 crores in Q2FY24, down 23.3% QoQ / 8.1% YoY.
• Provision showed a sharp decline to Rs. 1,815 crores in Q2FY24, down from Rs. 2,652 crores in Q1FY24 and Rs. 3,039 crores in Q2FY23 due to the prudent asset quality management.
• The bank reported an unexpected decline in net profit of Rs. 14,330 crores in Q2FY24, down 15.1% QoQ / up 8.0% YoY and well below the market estimates of Rs. 14,500 crores.
• NIM stood at 3.31% in Q2FY24, down 2bps / up 14bps YoY.
• Gross NPA stood at 2.55% in Q2FY24, down 21bps QoQ / down 97bps YoY.
• Net NPA stood at 0.64% in Q2FY24, down 7bps QoQ / down 16bps YoY.
• Credit Cost for Q2FY24 stood at 0.22%, down 10bps QoQ/ 6bps YoY.
• Capital Adequacy Ratio stood to 14.28% in Q2FY24 from 14.56% in Q1FY24 and 13.51% in Q2FY23.
• Gross Deposits stood at Rs. 46,89,218 crores in Q2FY24, up 3.5% QoQ / up 11.9% YoY.
• Gross Advances stood at Rs. 33,45,167 crores in Q2FY24, up 3.4% QoQ / up 13.4% YoY.
• CASA stood at 41.88% in Q2FY24 compared to 45.33% in Q1FY24 and 44.63% in Q2FY23.

SBI Latest Quarterly Results Analysis

Shreyansh Shah, Research Analyst, StoxBox said, "State Bank of India - the largest PSU bank - reported a mixed set of numbers in Q2FY24, which was not expected from the giant. Although the bank reported a decent net interest income ahead of market expectations, the bank's net profit declined mainly on account of average growth in its fee income, commission income and cross-selling. The bank's sharp decline in the provisions was not enough to offset the average growth in the other income, which could have improved the profitability. However, it was recommendable on the bank's part to improve its asset quality with the decline in credit costs and slippages in this quarter. We feel that the bank has missed its direction and needs to buck up with the business growth, especially in this high-interest environment and intense competition seen not only by prominent private players but also by regional banks, SFBs and NBFCs, who are gradually increasing their market share in the banking system. However, our outlook for the bank remains intact due to the improvement seen in its asset quality and efficient management. We believe that the bank will take action to increase its treasury gains and fee income to maintain its RoAs above its target of 1% going forward."