SBI Q4 results: India’s largest lender posts record quarterly net profit of ₹16,695 crore, up 83% YoY

• This is the third consecutive quarter of an all-time-high standalone quarterly net profit for SBI.
  
• Asset quality improvements and a fall in provisions helped SBI beat analyst estimates in terms of profitability.
  
• The lender also declared a dividend of ₹11.3 per share.
  

State Bank of India (SBI) on Thursday posted its highest-ever standalone quarterly net profit of ₹16,695 crore in Q4, registering a growth of 83% on year and beating analyst estimates. Asset quality improvements and a fall in provisions helped India’s largest lender post a record profit.

This is the third consecutive quarter of record profit for SBI – in the December quarter, the lender posted a standalone net profit of ₹14,205 crore, and ₹13,265 crore in the September quarter.

For FY23, SBI’s net profit grew 59% to ₹50,232 crore.

SBI’s net interest income (NII) grew 29% YoY to ₹40,393 crore in the March quarter, while for FY23, NII stood at ₹1.45 lakh crore, growing by 20%.

The lender’s net interest margin (NIM) saw improvements on a quarterly as well as annual basis – during Q4, SBI’s NIM rose 44 basis points to 3.84%, while for the full FY23, its NIM came in at 3.58%, rising by 22 basis points.

100 basis points make up a percent.

NIM is a measure of how much a bank is earning as interest income from its customers versus how much it is paying on deposits.

Pre-provisioning operating profit (PPOP), or operating profit, in Q4 stood at ₹24,621 crore, up 25% YoY. For the full year, PPOP came in at ₹83,713 crore, up 11%.

Asset quality witnessed an improvement, too, with gross non-performing assets (NPA) at 2.78% in Q4, significantly down from 3.97% a year ago. Net NPA also moderated to 0.67% as against 1.02% a year ago.

Aiding the bottomline was a decline in provisions on both quarterly as well as annual basis. In Q4 FY23, loan loss provisions stood at ₹1,278 crore, down from ₹3,262 crore a year ago. Similarly, for FY23, loan loss provisions declined to ₹9,144 crore, from ₹14,087 crore in FY22.

Alongside provisions, the slippage ratio fell in FY23 to 0.65%, from 0.99% in FY22. Slippage ratio refers to the rate at which a fresh loan becomes stressed, so a decline in this ratio is a positive development.

SBI declared a dividend of ₹11.3 per share, with the record date set as May 31.

SBI’s Q4 and FY23 in numbers:


Source: Company reports

Loan growth outpaces deposit growth

Like many of its peers in the banking sector, SBI too reported faster growth in loans when compared to deposits. In Q4, SBI’s loan book grew at 15.99% YoY to ₹32.69 lakh crore, while deposits grew at a much slower pace of 9.19% YoY to ₹44.24 lakh crore.

Rising interest rates also reflected in the bank’s cost of deposits, which increased 16 basis points YoY to 3.99%. The cost of deposits has increased for the fourth consecutive quarter.

Retail loan growth outpaced corporate loans, rising 17.64% YoY to ₹11.79 lakh crore in Q4, while corporate loans grew at 12.52% to ₹9.8 lakh crore. Home loans grew at 14.07% to ₹6.41 lakh crore during this period.

SBI’s shares fell 2% to close at ₹574 apiece on Thursday.


SEE ALSO:

Investments in real estate, government capex to drive India’s investment cycle in FY24

Brokerages remain bullish on Bharti Airtel post Q4 results

The changing contours of cinema-goers & underperforming Hindi movies weigh down PVR Inox