Largest Lender in India Posts Strong Net Profit, Boosted by Higher Other Income; Asset Quality Improves

Largest Lender in India Sees Strong Net Profit Growth; Asset Quality Improves Net Profit Rises 28%, Driven by Higher Other Income and Robust Loan Growth

State Bank of India (SBI), the largest lender in India, announced its Q2 results for the September quarter on November 8, showcasing strong financial performance.

Growth in Net Interest Income and Net Profit

SBI's Net Interest Income (NII), its core income, grew by 5.4 per cent year-on-year to Rs 41,620 crore, slightly missing analysts’ estimate of Rs 41,639 crore. Net profit for the quarter surged by 28 per cent to Rs 18,331.4 crore, surpassing the expected Rs 15,426.5 crore.

Improvement in Asset Quality

SBI's asset quality improved sequentially, with Gross NPA falling to 2.13 per cent from 2.21 per cent in the previous quarter. Net NPA also declined to 0.53 per cent, compared to 0.57 per cent in June, exceeding analyst expectations.

NPA Figures and Provisions

On an absolute basis, SBI’s Gross NPA stood at Rs 83,369 crore, a slight decrease from Rs 84,226 crore in the June quarter. Net NPA improved to Rs 20,294 crore from Rs 21,555 crore. Provisions for the quarter stood at Rs 4,506 crore, higher than Rs 3,449.4 crore in Q1, and significantly up from Rs 115 crore during the same period last year.

Strong Loan Growth and Lower Slippages

SBI's loan growth remained strong at 15 per cent year-on-year. Gross Slippages decreased to Rs 4,951 crore from Rs 8,707 crore in the previous quarter, indicating improved loan quality.

Stock Performance

SBI's stock has delivered impressive returns, rising 31 per cent year-to-date and 45 per cent over the past year. Despite a 8 per cent rise in the month leading up to the earnings announcement, the stock dropped 1.9 per cent following the results, settling at Rs 844.