SBI Q2 profit rose 8% to Rs 14,330 crore
State Bank of India (SBI) said its second-quarter net profit rose 8% to Rs 14,330 crore, thanks to lower provisions for bad loans and net income (NII) rose 12.3% to Rs 39,500 crore.
However, the bank’s (SBI) http://www.thehindu.comnet interest margin fell by 12 basis points to 3.43 per cent due to higher deposit costs, SBI Chairman Dinesh Khara said while announcing the results at a press conference. The lender’s operating profit also fell by 8.07% year-on-year to Rs 19,417 crore.
The bank’s loan loss provisions fell by 9.75 per cent year-on-year to Rs 1,815 crore, he said. The bank announced credit growth of 12.4%, with local loans rising by 13.2%.
The growth in domestic progress was driven by progress achieved by small and medium enterprises (22.8%), followed by progress in the individual retail sector at 15.7%. Agricultural loans and corporate loans recorded growth of 14.8% and 6.62%, respectively. Bank deposits increased by 11.9%, including current and savings account deposits by 4.91%.
The bank’s asset quality improved as its gross non-performing loans (NPA) ratio of 2.55% improved by 97 basis points. The net non-performing assets ratio of 0.64% improved by 16 basis points.
The provision coverage ratio reached 75.5%, a decrease of 248 basis points. Slippages during the quarter increased by 13 basis points year-on-year and amounted to 0.46%, Khara said.
He said the outlook for domestic activity was improving thanks to continued strength in services, optimism about consumption and wages, public spending on infrastructure and the strength of the underlying financial sector balance sheet. .
“Consumer confidence has improved with most macroeconomic conditions improving… Growth is expected to accelerate over the remainder of the year, not least due to increased spending.” Deposits could grow by 16-17% in FY24.
Regarding expectations, Mr. Khara said: “Normally… During the busy period, we saw a sharp increase in credit growth. We expect growth of between 13 and 14%. We are seeing growth in all sectors, from retail, SMEs to agriculture.
Commenting on the increase in unsecured loans from lenders, Mr. Khara said: “I still stand by my view that our unsecured loan portfolio is better than valiant secured loans. Approximately 86% of our unsecured portfolio is allocated to people with payroll accounts with us, all of whom are in the government sector.
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