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SBI posts record quarterly profit; asset quality, provisions dip

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India’s largest lender depository financial institution of India (SBI) on Wednesday reported a 55.3% rise in its Q1 standalone net income of ₹6,504 crores as compared to ₹4,189 crores within the same quarter last year. The bank’s net interest income, the difference between interest earned and expended, witnessed a growth of three .7% at ₹27,638 crores as against ₹26,641 crore year-on-year (YoY).

The domestic net interest margin (NIM) stood at 3.15%. SBI’s other income surged in Q1 to ₹11,802.7 crores as compared to ₹7,957.5 crores within the year-ago quarter.

On the asset quality front, the gross non-performing asset (NPA) stood at 5.32% versus 4.98% on a sequential basis whereas internet NPA came at 1.77% against 1.50% quarter-on-quarter (QoQ). Slippages, or the fresh addition of bad loans, jumped quite four-fold to ₹15,666 crores.

The provisions and contingencies dipped to ₹10,052 crores from ₹11,150 crores QoQ and ₹12,501 crores YoY. the entire provision for COVID-19 uncertainty as of June 30 is ₹9,065 crores. The provision Coverage Ratio as of June 30 is 85.93% (87 .75% as of March 31).

”The spread of COVID-19 pandemic across the world has resulted in a decline in economic activities and movement in financial markets. ln this example, Bank is gearing up itself on all fronts to satisfy the challenges. things continue to be uncertain and therefore the Bank is evaluating things on an ongoing basis. Major challenges for the Bank might be from extended capital cycles, fluctuating income trends, and the probable inability of the borrowers to satisfy their obligations against the loans timely,” SBI said within the filing.

The bank is proactively providing against the challenges of likely stress on the Bank’s assets. A definitive assessment of the impact of COVID-l9 depends upon circumstances as they evolve within the subsequent period, it added.

Shares of SBI were trading over 2% higher post the earnings announcement at ₹456 per share on the BSE in Wednesday’s afternoon deals.

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