State Bank of India, the country's largest lender, on Friday reported its highest-ever quarterly profit, thanks to decline in provisions for bad loans and improvement in asset quality. The state-owned lender posted 41.17 per cent year-on-year (YoY) growth in standalone profit at Rs 5,583.36 crore for the third quarter ended December 31, 2019, compared to Rs 3,955 crore a year earlier.
"During the quarter, bank exercised the option of lower tax rate taking a one-time hit of Rs 1,333 crore. Excluding the impact of this one-time additional hit, net profit in Q3FY20 would have been Rs 6,916 crore against Rs. 3,955 crore in Q3FY19," SBI said in a filing to the BSE.
The public sector lender's net interest income (NII), which is the difference between interest earned and interest expended, rose by 22.42 per cent to Rs 27,779 crore in Q3FY20 versus Rs 22,691 crore in Q2FY19. Domestic Net Interest Margin (NIM) improved to 3.59 per cent in Q3FY20, registering an increase of 62 basis points (bps) YoY and 37 bps sequentially.
Non-interest income or fee income for Q3FY20 stood at Rs 5,635 crore, registering a year-on-year growth of 19.30 per cent.
SBI's operating profit surged 44.34 per cent to Rs 18,223 crore in December quarter of this fiscal from Rs 12,625 crores in the corresponding period a year-ago.
The bank's provision coverage ratio (PCR) improved significantly by 710 basis points Y-o-Y from 81.73 per cent as on December 2019. Sequentially also PCR has improved by 50 bps.
On asset front, SBI's gross non-performing assets (NPAs) ratio declined to 6.94 per cent during December quarter of FY20 as compared to 8.71 per cent in the same quarter last year. Net NPA also fell to 2.65 per cent as against 3.95 per cent in the corresponding period last year. In absolute terms, gross NPAs declined to Rs 1.59 lakh crore from Rs 1.88 lakh crore, while net NPAs reduced to Rs 58,248 crore from Rs 80,943 crore during the year-ago period.
During October-December quarter, gross slippage stood at Rs 16,525 crore, which included exposure of around Rs 7,000 crore to a large housing finance company.
While Capital Adequacy Ratio (CAR) improved by 96 bps YoY to 13.73 per cent, Cost to Income Ratio rose from 56.97 per cent in Q3FY19 to 52.45 per cent in Q3FY20.
Boosted by strong Q3 results, SBI shares jumped 2.57 per cent to trade at Rs 318.70 apiece on the Bombay Stock Exchange.
By Chitranjan Kumar