India, Bollywood Fever: The State Bank of India (SBI) announced its highest standalone quarterly net profit at ₹20,698 crore in the fourth quarter. This increase was attributed to strong growth in non-interest income, including treasury income, strict control over operating expenses, and write-back in standard asset provisions and other provisions.
In comparison, the bank reported a net profit of ₹16,695 crore in the same quarter last year. This represents a year-on-year increase of about 24% and a sequential increase of about 126%.
During a meeting on Thursday, the bank’s central board declared a dividend of ₹13.70 per equity share of ₹1 each fully paid up for the fiscal year 2023-24.
Total non-interest income, which includes fee income, forex income, and profit or loss on sale/revaluation of investments, increased by about 24% to ₹17,369 crore from ₹13,961 crore.
The growth in operating income (comprising net interest income and non-interest income) at 8.59% year-on-year (₹59,024 crore) outpaced the growth in operating expenses (including employee cost and other operating expenses) at 1.83% year-on-year (₹30,277 crore). This resulted in the operating profit increasing by 17% to ₹28,747 crore.
SBI Chairman Dinesh Kumar Khara is optimistic about sustaining the loan growth seen in FY24 into FY25 and maintaining the net interest margin at the current level. The bank aims for a 14-16 per cent growth in loans (compared to 15.24 per cent in FY24) and a 12-13 per cent growth in deposits (compared to 11.13 per cent).
Khara noted that the bank has a sanctions pipeline of ₹4-lakh crore, with private sector entities accounting for 75 per cent of these sanctions and public sector entities for the rest. The surplus holding of statutory liquidity ratio securities stood at ₹3.5-lakh crore.
Although the current capital adequacy ratio (14.28 per cent as of March-end 2024) is sufficient to support up to ₹7-lakh crore of balance sheet growth, the bank is open to raising equity capital if needed.
The net interest margin for the entire bank decreased to 3.28 per cent in the reporting quarter from 3.37 per cent a year ago.
Provisions for employees decreased by about 28 per cent year-on-year in the reporting quarter to ₹5,225 crore.
While loan loss provisions increased by 156 per cent to ₹3,294 crore, the bank received write-backs from standard asset provisions (₹370 crore) as well as from other provisions (₹1,306 crore).
Asset quality improved, with gross non-performing assets (NPAs) decreasing to 2.24 per cent of gross advances as of March-end 2024, down from 2.42 per cent as of December-end 2023. Net NPAs also decreased to 0.57 per cent of net advances from 0.64 per cent.
As of March-end 2024, gross advances increased by 15.24 per cent year-on-year to ₹37,67,535 crore, with robust growth across all segments. Retail, agriculture, and MSME (RAM) advances and corporate advances surpassed ₹20-lakh crore and ₹11-lakh crore, respectively.
Total deposits rose by 11.13 per cent to ₹49,16,077 crore. The share of low-cost current account and savings account (CASA) deposits decreased to 41.11 per cent of domestic deposits from 43.80 per cent.
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