SBI Q2 result update!
Last updated: 04 Nov, 2020 | 01:06 pm
- Profit beats estimates: India’s largest Banks’ net profit stood at ₹4,574 crore in Q2FY21 as against a loss of ₹3,012 crore in the same quarter a year ago, beating street expectations. Analysts had earlier anticipated a profit of about ₹3,689 crore.
- Operating Performance: SBI’s net interest income, rose 14.55% on a yearly basis to ₹28,181. Total income was up 3.4% yearly to ₹75,342 crore. Net Interest Margin (NIM) improved to 3.34% in Q2FY21, registering an increase of 0.12% on a yearly basis. Total Deposits grew at a healthy 14.41% on a yearly basis out of which Current Account Deposit grew by 8.55% while Saving Bank Deposits grew by 16.28%. Credit growth stood at 6.02% yearly, mainly driven 14.55% growth in Retail Advances with Agri Advances growing by 4.19% and Corporate Advances by 2.82%. Home loans, which constitutes 23% of Bank’s domestic advances, grew 10.34% yearly. The following chart shows SBI’s loan portfolio.
- Asset Quality: Net NPA ratio stood at 1.59%, down 1.2% on a yearly basis and 0.27% on a sequential basis whereas Gross NPA ratio stood at 5.28%, down 1.91% on a yearly basis and 0.16% on a sequential basis. If the bank had classified the loan accounts as NPA after August 31, 2020, as per RBI's IRAC norms. Gross NPA would have been at 5.88% and Net NPA at 2.08%. The Supreme Court passed an interim order on September 03, 2020, directing that the accounts which were not declared NPA till August 31, 2020, shall not be declared NPA till further orders. Provisions fell 49% yearly to ₹5,619 crore, the bank made additional provisions worth ₹239 crore against accounts that may be impacted by the Covid-19 pandemic. This increased the total provisions held by the bank against such accounts to Rs 3,247 crore as on Sept. 30.
- Restructured Assets: Under the ambit of RBI’s one-time restructuring scheme for Covid affected loans, the bank received restructuring requests for loans of amount ₹6,495 crore. Out of this ₹4,000 crore were corporate loans, ₹1,300 crore retail loans and ₹1,100 crore of MSMEs. The bank expects further ₹13,000 crore worth of loans to raise restructuring requests before the deadline, mostly from the corporate and MSME books.
The sharp spike in net profit was majorly on the account of growth in Net Interest Income and fall in provisions. Loans and deposit growth has been steady. Though asset quality, for now is stable, going forward stress may emerge. As of September 30, Agri segment has a GNPA ratio of 14% and the corporate segment at 8%.