SBI Q1 results announced!
Last updated: 31 Jul, 2020 | 11:42 am
- Profit spurts because of stake sale, beats estimates: India’s largest bank State Bank of India reported a standalone profit of ₹4,189.34 crores for the quarter ended June 2020, recording a growth of 81% on a YOY basis. This included a one time gain of ₹1,540 crores due to a 2.1% stake sale in SBI Life Insurance Co.Net interest income (NII) for the quarter stood at ₹26,641 crore against ₹ 22,938 crore in the corresponding quarter a year ago.Net Interest Margin (NIM) improved to 3.24% in Q1FY21, registering an increase of 23 bps YoY.
- Provisioning: Total provisions jumped 36.1%YOY to ₹12,501 crores, however, were below the figure of ₹13,495 crores in Q4FY20.”SBI’s Provisions for Non-Performing Assets fell 19% YOY to ₹9,420 crores, the figure for QYFY20 stood at ₹11,894 crores. This is when the banks are staring at a fresh NPA wave after the moratorium ends” . Additional COVID-related provisions of ₹ 1,836 crores were made in this quarter. Total COVID-related provisions now stand at ₹3,008 crores.
- Asset quality: Gross NPA% fell to 5.44% in Q1FY21 from 6.15% in QYFY20 and from 7.53% a year ago.Net NPA% stood at 1.88% against 2.23% in Q4FY20 and against 3.07% a year ago. Fresh slippages were at ₹3,637 crores, lower than ₹ 8,105 crores reported during Q4FY20 and ₹16,212 crores a year ago. Capital Adequacy Ratio (CAR) has improved by 51 bps YoY to 13.40% as of June 2020 with TIER 1 capital of 11.35%. It must be noted that though these numbers state that asset quality improved during the quarter, it is essential to note that the asset quality position of banks would be much better assessed after the moratorium ends. It was because of the moratorium that slippages have been at such low levels. Going forward the Indian banking sector and especially Public Sector banks are expected to see their NPA’s shoot up.
- Moratorium statistics: Following the industry trend,SBI’s loan book under moratorium stood at 9.5% at the end of June quarter, against 23% in the March quarter. As per tha bank out of 9.5%, 2% has been claimed by 'AA' and 'AAA' rated companies for preserving cash, while 4.2% has been claimed by retail and 3.3% claimed by private corporates.
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