SBI Q3 net profit at ₹3,955 crore; asset quality improves2 min read . Updated: 01 Feb 2019, 06:13 PM IST
- SBI posted a net profit ₹3,954.81 crore compared to a loss of ₹2,416.37 crore in the year-ago period
- On Friday, shares of the bank gained 0.22%
Mumbai: The country’s largest lender State Bank of India on Friday posted a net profit of ₹3,954.81 crore, the highest ever in seven years. Net profit rose on account of improved asset quality and strong net interest income (NII) growth.
The bank posted a net profit ₹3,954.81 crore for the three months ended 31 December compared to a loss of ₹2,416.37 crore in the year-ago period. Profit was higher than ₹3,270 crore estimated by a Bloomberg poll of 18 analysts.
Net interest income, or the difference between interest earned on loans and that paid on deposits, rose 21.42% to ₹22,690.99 crore from ₹18,687.52 crore in the corresponding period last year. Other income, which includes core fee income, dropped 0.61% to ₹8,035.23 crore in the three months from ₹8,084.17 crore a year ago.
Gross non-performing assets (NPAs), as a percentage of total advances, fell to 8.71% in the December quarter compared to 9.95% in the previous quarter and 10.35% in the year-ago December quarter.
Net NPA ratio was at 3.95% against 4.84% in the July-September quarter and 5.61% in the year-ago quarter.
Provisions during the quarter fell 68.18% to ₹8670 crore as against ₹14171 crore crore in the year-ago quarter. In the July-September quarter, the bank had set aside ₹12,960 crore in provisions. The bank said it’s working to bring down gross NPA to below 7% and net NPA to below 3% by March end.
“The slippages are under control. The net profit of the quarter which is ₹3,955 crore has to be viewed in the light of accelerated provisioning, which we made during the quarter. As a result of that, net NPAs have come down to below 4 per cent. We are working in the direction in bringing down the net NPAs and we should be below 3 per cent by the end of March 2019," said Rajnish Kumar, chairman, SBI.
Kumar also said that the bank has an exposure of ₹900 crore to Infrastructure Leasing & Financial Services at the holding company level and has made 50% provisioning against the exposure.
According to Kumar, the bank currently has 8 loan accounts which are in the advance stage of resolution and will help the bank recover ₹34,000 crore.
On Friday, shares of the bank gained 0.22% to Rs294 apiece, while the benchmark Sensex index gained 0.82% to 36552.19 points.