State Bank of India (SBI)— the country’s largest lender — reported a ₹3,955 crore net profit for the October-December period compared with a ₹2,416 crore loss recorded during the year-earlier period.
Slippages were contained, resulting in lower provisioning. This, coupled with a healthy growth in net interest income, helped the lender to post profit.
Net interest income grew 21.4% to ₹22,691 crore on the back of 15% growth in loans. Domestic net interest margin improved 17 bps (basis points) sequentially to 2.97% in the third quarter on increase in yield on advances while cost of funds remained flat.
Provision dropped 39% to ₹8,670 crore mainly aided by write-back on investment depreciation of ₹7,994 crore. Loan loss provision was ₹13,971 crore, a decline of 21.3%.
Fresh slippages were contained at ₹4,523 crore compared with a whopping ₹25,836 crore during the year-earlier period.
Gross NPA ratio improved to 8.71% from 10.35% a year ago and 9.95% sequentially. Net NPA ratio improved to 3.95% compared with 5.61% a year ago.
“The performance shows excellent improvement in all parameters, whether it is the profit, business growth or asset quality. Slippages are under control,” said Rajnish Kumar, chairman, SBI.
Loan recovery improves
The provision coverage ratio has also improved sharply to 56.89%, excluding written-off accounts, from 53.95% in the previous quarter. Recovery from written-off accounts registered a robust growth of 55.98% to ₹2,107 crore.
Going ahead, the bank expects to improve its performance, Mr. Kumar said. The burden of provisioning will come down by at least ₹900 crore as the bank has made all the provisions required for gratuity.