SBI Q2 net profit surges 28% to ₹18,331 crore

State Bank of India (SBI), India’s largest commercial bank, for the second quarter reported 28% growth in net profit at ₹18,331 crore as compared with ₹14,330 crore in the year ago period. 

The Bank’s chairman Challa Sreenivasulu Setty attributed this growth to containing the operating expenses and increasing both operating income –interest income as well as non interest income and also normalisation in employee cost.

“The spike in the employee costs have been evened out now, and that is definitely a big contribution. And we have tried to reduce and contain the operational expenses also in terms of the interest cost and we tried to move the detail on loan advances,” he said while answering a question from The Hindu.

“Directionally we are focusing on increasing our interest income. And the renewed focus on the non interest income and containing the operational expenses by bringing the operational efficiencies,” he added.

The bank’s operating profit for the quarter increased by 51% to ₹29,294 crore. Net interest income for the quarter ended September 2024 increased 5.37% Year on Year (YoY) to ₹41,620 crore while domestic Net Interest Margin dropped 16 basis points (bps) to 3.27%.

During the quarter the bank made loan loss provisions of ₹3,631 crore, which is 100% more than the previous year. 

Gross Non Performing Asset (GNPA) at ₹83,369 crore declined 4.14% YoY and Net Non Performing Asset (NNPA) declined 4.96% to ₹20,294 crore from ₹21,352 crore a year ago.

The slippage ratio grew 5 bps to 0.51%, the credit cost increased 16 bps to 0.38%. 

The gross advances of the bank grew 14.93% YoY to ₹39,20,719 crore. The deposits grew 9.13% to ₹51,17,285 crore.  

In advances, domestic corporate loans grew 18.35% to ₹11,57,171 crore, while domestic personal retail loans including housing loans increased 12.32% to ₹13,96,624 crore. Agriculture advances grew 17.67% YoY. 

The bank had earlier given the guidance of 14% to 16% in loan growth and it is holding on to that guidance, the chairman said.

The bank is also looking at deposit growth in double digit in the near future, he added.  

The capital adequacy ratio of the bank stood at 13.76% at the end of the quarter. At the current capital adequacy ratio the bank can support additional credit growth of Rs 10 lakh crore, the chairman said.

The board has on Friday authorised the bank to raise ₹20,000 crore through infrastructure bonds.