The country’s largest lender, State Bank of India (SBI), on Saturday reported a 74 percent increase in its after-tax independent profit to Rs.13,265 crore in the quarter ended September 2022 compared to Rs.7,627 crore in the same quarter last year.
This was the highest quarterly net profit on record by the lender, supported by healthy growth in net interest income (NII) and a decline in provisions for non-performing loans.
Net interest income, which is the difference between interest earned and interest paid, rose 12.83 per cent to Rs.35,183 crore from Rs.31,184 crore last year. That growth was led by an improvement in borrowing across segments and strong asset quality, the bank’s chairman Dinesh Khara told reporters.
The domestic net interest margin (NIM) improved 5 basis points (bps) to 3.55 percent.
In terms of asset quality, the gross non-performing assets (GNPA) ratio improved from 4.9 percent to 3.52 percent in the July-September 2022 quarter. Net NPAs fell to 0.8 percent from 1.52 percent.
The improvement in asset quality was reflected in the bank’s borrowing costs, which fell to 0.28 percent from 0.43 percent.
New slippages for the quarter amounted to Rs.2,399 crore compared to Rs.4,176 crore in the second quarter of FY22.
Loan loss provisions fell 25.5 per cent to Rs 2,011 crore
from Rs 2,699 crore in the same quarter last year.
The bank posted healthy loan growth of 19.9 percent, with corporate loans up 21.18 percent and retail loans up 18.84 percent. Khara expects credit growth of 14-16 percent in the current fiscal year.
“Capacity utilization has improved and the type of demand we’ve seen on the ground gives us confidence,” he said. The capital adequacy ratio (CAR) was 13.51 percent versus 13.35 percent.
Khara said the bank remains very well capitalized and internal provisions are more than sufficient to support the company’s normal growth requirements.
Regarding the handling of international trade in rupee, its managing director (international banking, global markets and technology) CS Setty said the lender had reached out to its 250 relevant banks to make connections, but no dedicated Vostro account had been opened to date .
“There are several banks that have come back to us for connections. We need regulatory approval here and they also require approval from their regulators. It’s all underway,” Setty said, adding that the lender is taking this very seriously.
On July 12, the RBI had established a mechanism to settle international trade in rupees “to encourage the growth of world trade centered on exports from India and to support the increasing interest in the rupee by the global trading community”.
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