On February 3, State Bank of India (SBI) disclosed a Q3 standalone net profit of ₹9,164 crore, reflecting a 35% decrease in the December quarter, according to a filing with the stock exchange .
Higher operating expenses impacted SBI’s net profit for the October-December quarter, the bank reported.
Achievements
In the initial nine months of FY24, the bank’s profit reached ₹40,378 crore, showing a 20.40% rise compared to the same period in the prior fiscal year, which recorded ₹33,538 crore.
The bank experienced a year-on-year (YoY) growth of around 14.38% across all segments. Corporate advances exceeded ₹10 trillion, and SME advances went beyond ₹4 trillion, indicating expansion in both sectors.
During 9MFY24, Return on Assets (ROA) increased by 0.94%, rising by 7 basis points (bps) from 9MFY23. The Return on Equity (ROE) for the same period reached 19.47%, marking an 88 bps improvement from the previous fiscal.
Gross Non-Performing Assets (NPA) showed improvement, standing at 2.42%, a 72 bps reduction compared to the previous year. Net NPA also improved to 0.64%, decreasing by 13 bps YoY. The Credit Cost for 9MFY24 was reported at 0.25%, indicating a 12 bps improvement from the same period in the previous fiscal year.
The Provision Coverage Ratio (PCR) hit 74.17%, and when factoring in Additional Unsecured Credit Amount (AUCA), it reached 91.49%. Total non-NPA provisions, not accounted for in PCR, amounted to ₹33,472 crore, making up around 149% of Net NPAs at the end of Q3FY24.
Approximately ₹95,142 crore in business advances were generated through Analytical leads, reflecting a 37% year-on-year growth.
SBI’s Performance in July-September Quarter of FY24
SBI’s performance in the July-September period (Q2 FY24) showed a notable 8.0% rise in standalone net profit, reaching Rs 14,330 crore, along with a 12.3% increase in Net Interest Income (NII) to Rs 39,500 crore.
Anticipated Outcomes
The decline aligned with analysts’ expectations. According to Shreyansh Shah, a Research Analyst, ‘We anticipate positive Q3FY24 results from SBI, despite a slight expected dip in Net Interest Margins (NIMs) due to ongoing high fund costs. We project the bank’s overall profitability to experience a substantial double-digit growth this quarter, driven by robust advances supported by increased infrastructure spending. Additionally, the bank’s significant presence in salary accounts suggests that the CASA and CD ratio should remain stable. This quarter’s standout performance is anticipated in the notable growth of other income, thanks to the bank’s strategic focus on leveraging its extensive network of 22,405 branches for cross-selling opportunities.”
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