State Bank of India (SBI) Friday posted a 41.17 per cent year-on-year growth in the standalone net profit at Rs 5,583.36 crore – its highest ever quarterly net profit– for the December quarter of FY20 (Q3FY20). During the December quarter of FY19, the bank had posted a net profit of Rs 3,955 crore.


Sequentially, the net profit grew 85.38 per cent, from a profit of Rs 3,012 crore reported in the September quarter of the current fiscal (Q2FY20).



On a consolidated basis, the bank reported a net profit of Rs 6,531.95 crore.


“During the quarter, the bank exercised the option of lower tax rate taking a one-time hit of Rs 1,333 crore. Excluding the impact of this one-time additional hit, net profit in Q3FY20 would have been Rs 6,916 crore, as against Rs 3,955 crore in Q3FY19,” the bank said in a statement.


That apart, the operating profit increased by 44.34 per cent to Rs 18,223 crore in Q3FY20, as against Rs 12,625 crores in Q3FY19.


At 1:47 pm, the stock was trading 1.32 per cent higher at Rs 314.8 apiece. In comparison, the benchmark S&P BSE Sensex was 0.04 per cent lower at 40,898.37 level. In the intra-day trade, the stock hit a high of Rs 321.6 (up 3.5 per cent).


During Q3FY20, the lender’s profit before tax (PBT) stood at Rs 10,969.66 crore, registering a jump of 65.74 per cent YoY compared to Rs 6,618.73 crore reported in Q3FY19, and a whopping 116.80 per cent rise from Rs 5,059.83 crore logged in Q2FY20.


For the quarter under review, the country’s largest public lender’s net interest income (NII) jumped 22.42 per cent YoY to Rs 27,778.79 crore, compared to Rs 22,691 crore reported in the same quarter last year. On a quarterly basis, the income – which is the difference between the interest earned and expended – rose 12.92 per cent from Rs 24,600 crore logged in Q2FY20.


Domestic Net Interest Margin (NIM) improved to 3.59 per cent in Q3FY20, registering an increase of 62 bps YoY and 37 bps sequentially, the bank’s financial statements showed.


ASSET QUALITY


The Mumbai-headquartered bank’s slippages rose a staggering 265.3 per cent YoY to Rs 16,525 crore in the recently concluded quarter, as against Rs 4,523 crore in the December quarter of FY19. The slippages included exposure worth Rs 7,000 crore, to a large Housing Finance, the bank said.


Corporate slippages came in at Rs 9,467 crore, while Agricultural slippages were Rs 2,965 crore.


On the other hand, the state-owned bank’s gross non-performing assets (GNPA) came in at Rs 1.59 lakh crore, down nearly 15 per cent YoY, as compared to Rs 1.87 lakh crore logged in Q3FY19. Further, it’s asset quality improved on a quarterly basis, as the GNPAs decreased from Rs 1.61 lakh reported in Q2FY20.


As for net NPA (NNPA), the number came in at Rs 58,248.61 crore, down from Rs 80,943.51 crore reported in the same quarter last year, a drop of 28 per cent QoQ.


In terms of ratio, the GNPA ratio came in at 6.94 per cent, while NNPA ratio stood at 2.65 per cent.


As on December 31, 2019, the bank has about 617 cases admitted to the National Company Law tribunal (NCLT). Of these cases, NPAs make up for accounts worth Rs 53,490 crore.


The bank, further, reported provisions at Rs 7,252.90 crore, up from Rs 6,006.2 crore set aside in Q3FY19, and Rs 13,138.9 crore in Q2FY20. The bank, during Q3FY20, set aside provisions for non-performing assets (NPAs) at Rs 8,193.06


Analysts at Prabhudas Lilladher had pegged the provisions at Rs 8,124.5 crore for the December quarter. “We expect strong provision release from Essar Steel recovery benefitting massively earnings,” they had written in an earnings preview note.


Meanwhile, analysts at Emkay Global had expected the provisions to rise in Q3FY20 due to pending NPA provisions of Rs 4,650 crore for FY19, along with accelerated provisions on DHFL, along with slip in other large accounts including Suzlon (NFB), CG Power, and ADAG NBFC group.


LOANS


During the quarter under review, the bank’s credit book grew 6.79 per cent YoY to Rs 23.01 lakh crore, up from Rs 21.55 lakh crore.


Of this, corporate loans came in at Rs 7.71 lakh crore, retail came in at Rs 7.19 lakh crore, agricultural loans were at Rs 2.10 lakh crore, and SME were Rs 2.78 lakh crore.


Notably, the retail loans have jumped 17.49 per cent YoY, while corporate loans have contracted by 0.48 per cent YoY. Credit Cost at the end of Q3FY20 has declined 62 bps YoY to 1.80 per cent, the bank said.


For Q3FY20, Prabhudas Lilladher had expected the bank to report a loan growth of 9 per cent YoY and 4 per cent QoQ at Rs 22.32 lakh crore. Credit cost, meanwhile, was seen at 1.46 per cent.



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