Country's largest lender State Bank of India on February 4 reported a 6.9 percent year-on-year decline in standalone profit at Rs 5,196.22 crore for the quarter ended December 2020, dented by higher provisions and slower NII growth.
Net interest income, the difference between interest earned and interest expended, grew by 3.7 percent year-on-year to Rs 28,819.94 crore in Q3FY21, meeting analysts' estimates. NII in Q3FY20 inflated by recovery of Essar Steel account.
"Credit growth stood at 6.73 percent YoY, mainly driven by retail (personal) advances (15.47 percent YoY), SME (5.62 percent YoY) and corporate advances (2.23 percent YoY). Including the YoY growth in corporate bonds / commercial papers of Rs 44,161 crore, the loan book has grown by 8.16 percent YoY," said SBI in its BSE filing.
Total deposits grew at 13.64 percent YoY, out of which current account deposit grew by 11.33 percent YoY, while saving bank deposits rose by 15.99 percent YoY, the bank added. The net interest margin remained stable at 3.12 percent sequentially, but contracted 21 bps year-on-year.
Profit was estimated at Rs 5,332.1 crore and net interest income at Rs 28,750.3 crore in Q3FY21, according to the average of estimates of analysts polled by CNBC-TV18.
Non-interest income (other income) grew by just 1.5 percent to Rs 9,246.15 crore due to fall in fee income (which contributed 58 percent to total non-interest income), but pre-provision operating profit fell 4.9 percent to Rs 17,333.16 crore compared with corresponding period.
"Excluding the one-off interest income and other income during Q3FY20, the YoY growth in net profit and operating profit for Q3FY21 would be 133.78 percent and 26.23 percent respectively," SBI said.
Provisions and contingencies increased significantly by 42.6 percent year-on-year to Rs 10,342.39 crore in Q3FY21, though sequentially saw a 2.2 percent rise in the same.
State Bank of India said it had proactively made an additional provision of Rs 6,247 crore as at December 2020 towards the possible impact of COVID-19 pandemic. "Bank's management is not expecting any significant impact on Bank's liquidity or profitability."
Provision coverage ratio at 90.21 percent in Q3FY21 improved by 848 bps YoY and 202 bps sequentially.
The gross non-performing assets (NPA) as a percentage of gross advances at 4.77 percent in Q3FY21 declined 51 bps sequentially and the net NPA at 1.23 percent fell 36 bps QoQ, said the SBI in its BSE filing. All segments of loan books reported decline in NPA QoQ with NPA from corporate book down 35 bps and retail 62 bps.
On proforma basis without reference to the Supreme Court interim order, the gross NPA would have been at 5.44 percent and net NPA at 1.81 percent in Q3FY21.
The Supreme Court in September last year, in the case of Gajendra Sharma versus Union of lndia and another, had directed that "the accounts which were not declared as NPA till August 2020 shall not be declared as NPA till further orders". Accordingly, the bank has not declared any domestic loan account as NPA which was standard as on August 2020.
The fresh slippages were sharply lower at Rs 237 crore for the quarter ended December 2020, compared with Rs 3,085 crore in previous quarter, but proforma slippages for Q3FY21 were at Rs 2,073 crore and proforma slippages for 9 months at Rs 16,461 crore, said SBI.
Slippages ratio declined significantly to 0.04 percent at the end of December quarter 2020, compared with 0.46 percent in Q2FY21 and 2.94 percent in Q3FY20, the bank added.
SBI said the credit cost fell 108 bps year-on-year and 56 bps quarter-on-quarter to 0.38 percent in Q3FY21.SBI shares traded at Rs 342.20 on the BSE, rising 1.89 percent, with volumes of 46.31 lakh shares at 14:25 hours IST.