SBI Q2 profit surges 52% to Rs 4,574 crore, NII
India’s largest lender State Bank of India (SBI), registered a significant 51.9 percent year-on-year growth in standalone profit for September quarter, driven by lower provisions, higher net interest income and operating income.
Standalone profit increased to Rs 4,574 crore during the quarter, compared to Rs 3,012 crore in the year-ago period, beating analysts’ expectations.
Net interest income – the difference between interest earned and interest expended – climbed 14.6% year-on-year to Rs 28,181.5 crore in Q2FY21 with credit growth at 6.9% YoY and net interest margin at 3.34% for the quarter.
On the asset quality front, SBI’s gross non-performing assets as a percentage of gross advances declined 16 bps sequentially to 5.28% and net NPA fell 27 bps QoQ to 1.59% in the quarter ended September 2020.
Following the Supreme Court order dated September 3, 2020, the bank has not declared any domestic loan account as NPA which was standard as of August 31, 2020.
But the gross NPA and net NPA would have been at 5.88% and 2.08% respectively for the quarter, if the bank had classified the loan accounts as NPA after August 2020, in accordance with the Income Recognition and Asset Classification (IRAC) norms of the RBI.
Provisions and contingencies for the quarter at Rs 10,118 crore declined 23% compared to year-ago period and the sequential fall was 19.1% in Q2FY21.
Provision coverage ratio improved further to 88.19% as of September 2020, from 86.3% in June quarter.
The pre-provision operating profit in Q2FY20 was boosted by the stake sale in SBI Life Insurance Company.
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