The country's biggest lender State Bank of India on July 31 reported a standalone profit of Rs 4,189.34 crore for the quarter ended June 2020, a growth of 81.2 percent over a year-ago period driven by stake sale in life insurance business, but the provisions and lower non-interest income limited growth.
Net interest income, the difference between interest earned and interest expended, increased 16.1 percent to Rs 26,641.56 crore in June quarter compared to Rs 22,938.8 crore in year-ago period.
Profit as well as NII both were ahead of a CNBC-TV18 poll estimates of Rs 3,222.2 crore and Rs 23,940.3 crore respectively.
In June this year, SBI sold 2.1 percent equity stake in SBI Life Insurance Company via offer for sale route to comply with shareholding norms and raised Rs 1,539.73 crore.
The provisions and contingencies at Rs 12,501.3 crore increased by 36.1 percent year-on-year including additional provision of Rs 1,836 crore on account of COVID-19 related accounts, adhoc provision of Rs 1,614 crore with respect to wage revision and Rs 5,230.4 crore towards fraud accounts. However, provisions on sequential basis fell 7.4 percent.
SBI said its provisions only for non-performing assets at Rs 9,420.46 crore declined sequentially (down 20.8 percent) as well as year-on-year (down 19.1 percent) for the quarter ended June 2020.
"The provision of Rs 3,008 crore is held by bank on COVID-19 related accounts as on June 2020," it added.
During June quarter, the bank has provided for entire balance amount of Rs 5,230.37 crore towards the above fraud accounts as against the quarterly requirement of Rs 1,743.46 crore.
Asset quality improved significantly in the quarter ended June 2020, with gross non-performing assets (NPA) as a percentage of gross advances falling 71 bps QoQ to 5.44 percent and net NPA declining 37 bps QoQ to 1.86 percent.
State Bank of India has reported a sharp decline in fresh slippages at Rs 3,637 crore in Q1FY21, compared to Rs 8,101 crore in Q4FY20.
The moratorium was at 9.5 percent of total loan book at the end of June quarter, against 23 percent in March quarter.
Out of 9.5 percent moratorium, SBI said 2 percent claimed by 'AA' and 'AAA' rated companies for preserving cash, while 4.2 percent has been claimed by retail and 3.3 percent claimed by private corporates.
Non-interest income fell 0.7 percent to Rs 7,957.48 crore during the quarter YoY, while pre-provision operating profit increased sharply by 24.7 percent to Rs 16,521.35 crore in Q1FY21 YoY.
The stock extended gains after earnings, trading 3.32 percent higher at Rs 192.75 on the BSE at the time of publishing this copy.
SBI share price fell 9 percent in June quarter and plunged 44 percent year-to-date amid fear of likely increase in asset quality concerns especially after the end of six-month moratorium on August 31.