SBI Q4 Result: Profit below estimates

Profit rises, below estimates: India’s largest bank State Bank of India (SBI) has reported a 41% jump in net profit to Rs 9,113.5 crore in Q4FY22, below street expectations. Analysts had earlier anticipated a profit of Rs 9,927.6 crore. The higher bottom-line was aided by lower provisions. In the December quarter, SBI reported a net profit of Rs 8,432 crore.

Net interest income rises: A bank’s primary business is to borrow money and lend the same at a rate higher than the rate at which they borrowed. The income generated from this differential is known as net interest income. Net interest income (NII) for the bank rose 15.3% on year to Rs 31,198 crore. The net interest margin (NIM) for the bank during the March quarter rose 29 basis points to 3.4%. NII is lower than the analyst's expectation of Rs 31,570 crore.

Asset Quality Improves: SBI reported a gross Non-Performing Asset ratio at 3.97% in the fourth quarter of FY22, down by 48 basis points sequentially. In Q3FY22, the gross NPA reported was 4.5%. Net NPA declined by 32 basis points sequentially to 1.02%. The lender saw a 19% year-on-year decline in net bad loans to Rs 27,966 crore.

SBI reported gross slippages of Rs 2,845 crore. In the previous quarter, slippages was Rs 2,334 crore. On a sequential basis, slippages increased by 22%. The slippage ratio was at 0.43% against 0.37% in the previous quarter.

Deposits: Deposits grew 10.06% year-on-year at Rs 40.51 lakh crore. Total advances rose 11% YoY to Rs 28.18 lakh crore. Retail loans increased 15.11% from a year earlier and stood at Rs 10.02 lakh crore. Corporate advances stood at Rs 8.71 lakh crore, up 0.61% YoY. Term deposits increased by 11.54% and stood at Rs 21.45 lakh crore.

CASA: CASA capital is the cheapest source of capital for banks. The higher the number, the more profit a bank can earn. The current account and savings account deposits increased by 7.78% to Rs 17.75 lakh compared to last year's same period. The CASA ratio was 45.28%, down 85 bps.

Dividend: The board of the lender approved Rs 7.10 per share dividend. The record date for the purpose is May 26, 2022.

Other highlights: SBI's Capital Adequacy Ratio (CAR) at the end of Q3FY22 came in at 13.83% even without including the first-half profit. Credit Cost for the fourth quarter decreased by 112 basis points to 0.49% compared with last year. The cost to income ratio during the quarter stood at 53.31%, and it is lower by 29 basis points as compared to the same period a year earlier. Return on Assets (RoA) increased by 19 bps YoY to 0.67%

SBI Share price closed at Rs 450.50, down 4.79% on Friday afternoon.