State Bank of India Reports 28% Growth in Net Profit for Q2, Driven by Strong Other Income
SBI reported a 28% increase in net profit for Q2 FY2024, reaching ₹18,331 crore, boosted by a significant rise in other income. Key drivers included a 42% surge in non-interest income and a 5.37% increase in net interest income.
SBI
State Bank of India (SBI) exceeded analyst expectations with a 28% year-on-year increase in net profit for the second quarter ended September 30, 2024. The country's largest lender reported a net profit of ₹18,331.44 crore, up from ₹14,330.02 crore in the same quarter last year.
Analysts had anticipated a profit of around ₹15,500 crore, but SBI's results surpassed those estimates, driven by a 42% surge in other income and a 5.37% increase in core net interest income (NII). Other income reached ₹15,270.55 crore, compared to ₹10,790.63 crore a year earlier, while NII grew to ₹41,620 crore, up from ₹39,500 crore in the previous year.
The bank's other income includes fees from third-party services, treasury income, and recoveries from written-off accounts.
Despite the positive earnings, SBI's stock dropped by 1.86%, closing at ₹843.25 on the BSE.
SBI's provisions rose significantly, jumping to ₹4,505.73 crore from ₹115.28 crore last year. Provisions for non-performing assets (NPAs) amounted to ₹3,631.01 crore, up from ₹1,814.89 crore in the same period last year.
However, asset quality improved, with the gross NPA ratio declining to 2.13% from 2.21% sequentially and from 2.55% a year ago. The gross NPA value decreased to ₹83,369.23 crore, down from ₹86,974.08 crore in the previous year.
The bank reported a strong loan growth of 14.93%, rising to ₹39,20,719 crore from ₹34,11,252 crore last year. Deposits grew 9.13% to ₹51,17,285 crore, with the low-cost CASA (Current Account and Savings Account) ratio standing at 40.03%, slightly lower than the 41.88% recorded last year.
SBI Chairman C.S. Setty revised the bank's deposit growth outlook to 10-11% for the fiscal year, down from the earlier estimate of 12-13%. He also forecast credit growth at 14-16% for the same period. Setty added that the bank's capital adequacy ratio (CAR) would remain above 14%, and there were no plans to raise additional equity capital at this time, as the current capital base is sufficient to support ₹6 trillion in additional credit.
