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SBI Q2 results: Net profit jumps to record ₹7,626 crore, up 67% – Mint

India’s largest lender State Bank of India (SBI) today reported standalone second quarter net profit of 7,626 crore, which is the highest ever for the Bank, up 67% over last year. This compares with 4,574 crore in the corresponding quarter of last year (Q2FY21).

On Wednesday, SBI shares were up 3.86% in noon deals at 541.85 apiece on NSE. SBI scrip has comfortably outperformed the Nifty Bank and Nifty50 indices, rising 86.83% so far in 2021 (Year-to-Date). In the same period, Bank Nifty and Nifty rose 27.90% and 27.61% respectively.

In the last one year, the index heavyweight has rallied 154.95% as compared to 55.51% surge in Bank Nifty and 51.43% growth in Nifty50.

On a sequential basis, the profit rose 17% from 6,504 crore in the June quarter.

The state-owned lender’s net interest income (NII) — the difference between interest earned and expended — rose 10.6% to 31,184 crore for the reporting period.

SBI has incurred an exceptional item during the second quarter after it fully provisioned 7,418 crore on account of change in family pension rules, even as regulator granted dispensation to amortise in 5 years.

The net interest margin (NIM) of the lender during the September quarter rose 16 basis points to 3.50%.

SBI’s operating profit increased by 9.84% year-on-year to 18,079 crore in the second quarter from 16,460 crore in the last year period.

On the asset quality front, gross non performing assets (NPAs) came in at 4.90% in the September quarter, lower than 5.32% in the June quarter and 5.28% in the last year same quarter.

The non interest income of the Bank fell 3.7% to 8,207 crore in the second quarter as compared to 8,527 crore in the same period a year earlier.

Meanwhile, the net NPA ratio stood at 1.52% for the quarter under review.

Loan loss provisions during the quarter fell sharply to 2,699 crore, down over 55% from 5,619 crore in the last year period.

The Bank’s advances during the quarter rose by 6.17% over last year, mainly driven by personal retail advances (15.17% YoY) and foreign office advances (16.18% YoY).

Meanwhile, domestic advances growth stood at 4.61% for the period under review. Home loans, which constitute 24% of Bank’s domestic advances, has grown by 10.74% year-on-year.

SBI’s provision coverage ratio (PCR) is at 87.68% in the second quarter, while slippage ratio for the same period stood at 0.66% only, down from 2.47% in previous June quarter.

The Bank’s total deposits grew at nearly 10% when compared with last year, while current account deposits grew by 19.2% year-on-year and saving bank deposits grew by 10.55% year-on-year.

The Bank’s capital adequacy ratio (CAR) at the end of September quarter came in at 13.35% even without including first half profit.

Other highlights of SBI performance in second quarter

Credit Cost for the second quarter has declined 51 basis points to 0.43%, when compared with last year.

Cost to income ratio during the quarter stood at 54.10% and it is lower by 106 basis points as compared to same period a year earlier.

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