SBI Q1 Results: Board approves fundraising of up to ₹25,000 crore via tier-1,2 bonds in FY25

SBI Q1 Results: State Bank of India (SBI) announced its April-June quarter results for fiscal 2024-25 (Q1FY25) on Saturday, August 3, where the leading state-owned lender's board approved fundraising of up to ₹25,000 crore via tier-1 and tier-2 bonds in the current fiscal (FY25). The public-sector bank (PSB) also said that the current fundraising action is ‘’subject to the approval of the Government of India, wherever required.''

‘’The Central Board has accorded approval for raising funds in INR and /or USD by issue of Basel lll compliant Additional Tier 1 Bonds and Tier 2 Bonds, up to {25,000 crore (Rupees Twenty-five Thousand Crore) to lndian and/or overseas investors during FY25, subject to approval of Government of lndia, wherever required.'' said SBI in a regulatory filing to the stock exchanges today.

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SBI Q1 Results: Key Metrics

SBI reported an almost flat standalone net profit of ₹17,035 crore for the first quarter of the current fiscal year, growing one per cent compared to ₹16,884.2 crore in the corresponding period last year. The bank's total income increased to ₹1,22,688 crore in the first quarter up from ₹1,08,039 crore a year ago.

The PSB's net interest income (NII)—the difference between interest earned on loans and paid on deposit—rose 5.7 per cent to ₹41,125 crore, compared to ₹38,905 crore in the same period last year. During the quarter, the bank earned an interest income of ₹1,11,526 crore compared to ₹95,975 crore in the year-ago period.

The bank's asset quality showed significant improvement, with the Gross Non-Performing Assets (NPA) ratio declining by 55 basis points (bps) YoY to 2.21 per cent, compared to 2.76 per cent at June-end last year. The net NPA ratio also improved, dropping by 14 bps YoY to 0.57 per cent from 0.71 per cent a year ago.

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Operating profit rose 4.55 per cent year-on-year (YoY) to ₹26,449 crore. In the June quarter, SBI's Return on Assets (ROA) and Return on Equity (ROE) stood at 1.10 per cent and 20.98 per cent, respectively. SBI's net interest margin (NIM) was at 3.22 per cent, with domestic NIM slightly higher at 3.35 per cent, which indicates strong interest income relative to interest-earning assets.

SBI's credit growth remained robust at 15.39 per cent YoY in the June quarter. Domestic advances, a key component of this growth, expanded by 15.55 per cent YoY, driven primarily by Small and Medium Enterprise (SME) advances, which surged by 19.87 per cent YoY.

Agricultural Advances also showed a healthy increase of 17.06 per cent YoY. Retail Personal Advances and Corporate loans registered YoY growths of 13.60 per cent and 15.92 per cent, respectively. The bank's foreign offices also contributed to this positive trend, with their advances growing by 14.41 per cent YoY.

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Deposits rose 8.18 per cent YoY, with CASA deposits growing by 2.59 per cent YoY, resulting in a CASA ratio of 40.70 per cent as of June 30, 2024. This indicates a stable and growing deposit base, essential for the bank's funding and liquidity. The Provision Coverage Ratio (PCR), including advances under collection accounts (AUCA), stood at 91.76 per cent, with the overall PCR at 74.41 per cent.

The Slippage Ratio for Q1FY25 improved by 10 bps YoY to 0.84 per cent, and the Credit Cost for the quarter was reduced to 0.48 per cent. These improvements reflect SBI's stringent risk management practices and effective recovery mechanisms. SBI's Capital Adequacy Ratio (CAR) as of the end of Q1FY25 was 13.86 per cent. Shares of SBI settled 1.72 per cent lower at ₹847.90 apiece on the BSE.