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SBI net profit up 81% to ₹4,189 crore in Q1, beats estimates

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India’s largest public sector lender State Bank of India (SBI) on Friday reported a net profit of 4,189.3 crore in the June quarter of FY21, up 81% year-on-year (y-o-y), owing to a rise in net interest income.

SBI’s net interest income (NII) or the difference between interest earned and expended, rose 16% on a y-o-y basis to 26,641.5 crore. The bank’s profit was substantially higher than Bloomberg consensus estimate of 15 analysts that pegged it at 3,375 crore. In the June quarter of FY20, the bank had reported a net profit of 2,312 crore.

While SBI’s total provisions rose 36% y-o-y to 12,501 crore in the June quarter, its other income declined 0.7% y-o-y to 7,957 crore in the same period.

SBI said that during quarter it has made an additional provision of 1,836 crore for covid-19 and it hold total provisions of 3,008 crore for the pandemic as on 30 June.

The bank’s asset quality improved in Q1FY21, with gross non-performing asset (NPA) ratio – gross bad loans as a percentage of total loans – declining 71 basis points (bps) sequentially to 5.44%.

SBI’s total deposits rose 16% y-o-y to 34.19 trillion and its total advances rose 7.6% y-o-y to 22.98 trillion. Its capital adequacy ratio under Basel III guidelines was at 13.4% as on 30 June.

Credit Suisse said in a note on 7 July that June quarter earnings of banks will highlight “widening growth divergence among various lenders”.

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