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”.