SBI's Q1 Profit Soars 178% to Rs 16,884 Crore, Asset Quality Improves

State Bank of India (SBI) reports a remarkable 178% YoY surge in standalone net profit at Rs 16,884.29 crore for Q1, outperforming analysts' expectations. Net interest income rises 24.71%, and asset quality improves with a lower NPA ratio.

Aug 4, 2023 - 17:21
Aug 4, 2023 - 18:12
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SBI's Q1 Profit Soars 178% to Rs 16,884 Crore, Asset Quality Improves

State Bank of India Limited (SBI) has reported a phenomenal performance in the first quarter of the fiscal year, with its standalone net profit soaring by an impressive 178.24% year-on-year (YoY) to reach Rs 16,884.29 crore. This remarkable figure significantly surpasses the Rs 6,068.08 crore profit reported in the same quarter last year. Notably, this is the fourth consecutive quarter in which the bank has achieved a record net profit. The Q1 profit also exceeded analysts' expectations, who had forecasted growth in the range of 120-160% ahead of the quarterly results.

One of the key factors contributing to SBI's robust financial performance is its Net Interest Income (NII), which saw a substantial increase of 24.71% over the previous year. NII for the quarter amounted to Rs 38,905 crore, compared to Rs 31,196 crore in the corresponding quarter last year. This figure aligned closely with Street estimates, showcasing the bank's ability to effectively manage its interest income.

The bank also displayed improved efficiency in managing its Net Interest Margin (NIM), which increased by 24 basis points YoY to 3.47% in the June quarter from 3.23% in the same period last year. However, it is worth noting that NIM declined by 37 basis points compared to the previous quarter, which stood at 3.84%. Nevertheless, the overall NIM performance demonstrates SBI's focus on optimizing its interest-earning assets.

In addition to a stellar profit performance, SBI showcased a significant improvement in its asset quality during Q1. The gross non-performing assets (NPA) ratio stood at 2.76%, showing a substantial decline of 115 basis points from the previous year's 3.91%. This reduction indicates the bank's successful efforts in managing and resolving its bad loan portfolio, enhancing its overall asset quality.

During the first quarter, the state-run bank made provisions worth Rs 2,501.31 crore, reflecting a decline in provisioning compared to Rs 3,315.71 crore in the previous quarter and Rs 4,392.38 crore in the corresponding quarter last year. This decline in provisions is a positive indicator, as it reflects a lower requirement for setting aside funds to cover potential loan losses.

Further contributing to SBI's strong financial position, the bank reported a 13.90% YoY increase in gross advances, reaching Rs 33,03,731 crore as on June 30, 2023, compared to Rs 29,00,636 crore in the same period last year. Additionally, deposits witnessed significant growth, with a 12% YoY increase to Rs 45,31,237 crore from Rs 40,45,696 crore in the year-ago period.

Overall, SBI's remarkable performance in Q1 is a testament to its prudent financial management and strategic decision-making. The bank's ability to navigate the challenging economic environment and deliver exceptional results highlights its resilience and commitment to driving growth amidst uncertainty.

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Rahul Kumar Leaner || IT Consultant || Brand Consultant || Edupreneur || Team Management || Researcher || Entrepreneur