State Bank of India (SBI) reported its highest ever quarterly net profit of Rs 14,205 crore for the quarter ended December 2022, an increase of 68% over Rs 8,432 crore in the corresponding quarter of previous year.
The higher-than-expected increase in net profit came on the back of a higher net interest income, which rose 24% to Rs 38,069 crore on the back of 17% growth in credit. The bank’s loan book stood at Rs 31. 3 lakh crore at the end of the quarter.
Announcing the results, the bank’s chairman Dinesh Khara said that he was hopeful of good growth in infrastructure segment, particularly road and ports. “Iron and steel should see good demand. We expect very strong demand from consumer segment. There is growth in tourism, hotels and airport traffic and there could be opportunity to finance these segments,” he said.
Although bank deposits have been growing at a slower pace, Khara said that single-digit growth in bank deposits would not be a constraint. “We have Rs 3. 2 lakh crore of excess government securities and we can pull funds from there,” said Khara.
Profits were also bolstered by the sharp drop in the provisions for bad loans. The provisions for non-performing assets nearly halved to Rs 1,586 crore for the reporting quarter. The gross nonperforming assets ratio reduced to 3. 14% as against 3. 52% in Q2FY23 and 4. 5% in Q3FY22.
During the quarter, SBI’s stake in Jio Payments Bank reduced from 30% to 28. 9% as the bank did not participate in the rights issue of equity shares offered by the company. “According to the original scheme, SBI was required to stay invested for five years. Now that we are reaching five years, we are taking steps to rationalise our investment,” said Khara.
The higher-than-expected increase in net profit came on the back of a higher net interest income, which rose 24% to Rs 38,069 crore on the back of 17% growth in credit. The bank’s loan book stood at Rs 31. 3 lakh crore at the end of the quarter.
Announcing the results, the bank’s chairman Dinesh Khara said that he was hopeful of good growth in infrastructure segment, particularly road and ports. “Iron and steel should see good demand. We expect very strong demand from consumer segment. There is growth in tourism, hotels and airport traffic and there could be opportunity to finance these segments,” he said.
Although bank deposits have been growing at a slower pace, Khara said that single-digit growth in bank deposits would not be a constraint. “We have Rs 3. 2 lakh crore of excess government securities and we can pull funds from there,” said Khara.
Profits were also bolstered by the sharp drop in the provisions for bad loans. The provisions for non-performing assets nearly halved to Rs 1,586 crore for the reporting quarter. The gross nonperforming assets ratio reduced to 3. 14% as against 3. 52% in Q2FY23 and 4. 5% in Q3FY22.
During the quarter, SBI’s stake in Jio Payments Bank reduced from 30% to 28. 9% as the bank did not participate in the rights issue of equity shares offered by the company. “According to the original scheme, SBI was required to stay invested for five years. Now that we are reaching five years, we are taking steps to rationalise our investment,” said Khara.
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