SBI Q2 profit surges 52% to Rs 4,574 crore, NII

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.

Disclaimer –
This document is meant for the recipient only for use as intended and not for circulation. This document should not be reproduced or copied or made available to others. The information contained herein is from the public domain or sources believed to be reliable. While reasonable care has been taken to ensure that information given is at the time believed to be fair and correct and opinions based thereupon are reasonable, due to the very nature of research it cannot be warranted or represented that it is accurate or complete and it should not be relied upon as such. Also above note is not a recommendation to Buy or SELL and is only a view based on facts and figures and we will be in no way responsible for any losses incurred by anyone who uses this information to either trade or invests securities mentioned herein.