SBI posts 90 pc jump in Q4 net profit on core income

Mumbai: SBI's March quarter net zoomed nearly 90 per cent to Rs 18,094 crore on a consolidated level, helped by handsome performance on the core income front and an improvement in asset quality to the decadal best.

On a standalone basis, the country's largest lender reported an 83 per cent jump in its net profit at Rs 16,695 crore, while the same for FY23 came 58 per cent up at Rs 50,232 crore. Both the quarterly and fiscal year profits were the highest ever.

Its chairman Dinesh Khara said India remains resilient to external shocks owing to the large domestic consumer base, and the bank continues to see more funding opportunities in the future as well.

In the reporting quarter, the bank's core net interest income grew 29.47 per cent to Rs 40,393 crore on a 19 per cent growth in advances and a 0.45 per cent widening in the net interest margin to 3.60 per cent.

The non-interest income grew 17.52 per cent to Rs 13,961 crore, despite a marginal reduction in the largest component of fee income.

Khara told reporters that the bank sees credit growth moderating to 12-14 per cent in FY24, which will include a 10-12 per cent growth in the large-value loans.

He said the bank has visibility on making loans of up to Rs 3.5 lakh crore either by way of a demand pipeline or already sanctioned lines.

On the asset quality front, the bank reported an improvement to a decadal best on the gross non-performing assets ratio, which reduced to 2.78 per cent from 3.14 per cent in December and 3.97 per cent in the year-ago period.

This led to a decline in the money set aside to cover bad assets, and the total provisions halved to Rs 3,315 crore from the Rs 7,237 crore in the year-ago period.

Khara said as the asset quality improves, the ageing provisions will also give benefits on the provisions front.

To a question on the transition to an expected credit loss system of provisions, he said the bank is ready for the shift and already carries additional provisions of over Rs 35,000 crore, which are higher than the money required under the new system as per its internal estimates.

It will like to sustain the asset quality at the current levels, Khara said, pointing to the lower stress on the loans unpaid for 30-89 days before they get recognised as NPAs.

The bank is targeting a further improvement in the agri NPAs, which have reduced to 11 per cent, and hopes to get them into single digits, Khara said.

The bank's chairman said it also sees scope for a further widening in the NIMs without sharing a level that it is targeting, even though he conceded that the bank will have to increase term deposit rates shortly.

Pricing power is coming back on the corporate demand, and Khara said there is higher demand in infrastructure and renewable sectors.

On the capital adequacy front, the bank's overall buffers stood at 14.68 per cent as of March 31 against 13.83 per cent in the year-ago period.

The SBI scrip closed 2.11 per cent down at Rs 547.15 apiece on the BSE on Thursday against a 0.21 per cent correction on the benchmark.

When asked to comment on his initial complaint about the bank being valued lower and the increase in share prices lately, Khara said: "Yeh dil maange more".