State Bank of India (SBI) Achieves Remarkable Q2 Earnings
In a financial report that defied expectations, State Bank of India (SBI) announced a net profit of Rs 14,330 crore for the July-September FY24 quarter. This impressive figure represents an 8% increase from the Rs 13,265 crore the bank earned in the same period a year ago. SBI’s Q2 performance has astounded both analysts and the market alike, surpassing the projected net profit of Rs 14,221 crore for the quarter.
SBI’s Stock Performance Remains Stable
On November 4, India’s largest lender, SBI, demonstrated its strength by outperforming market forecasts. The bank’s shares traded at Rs 578.15 each on the Bombay Stock Exchange (BSE) on November 3, maintaining their value from the previous trading session. This stability in stock price underscores the confidence investors have in the bank’s future prospects.
Robust Net Interest Income (NII) Growth
SBI’s net interest income (NII) for the Q2FY24 reached an impressive Rs 39,500 crore, marking a substantial 12.3% increase compared to the Rs 31,184 crore reported in the corresponding quarter of the previous fiscal year. This growth in NII is indicative of the bank’s ability to effectively manage its interest-earning assets and liabilities.
Significant Improvement in Asset Quality
SBI demonstrated a significant reduction in its gross non-performing asset (NPA) ratio, which decreased to 2.55% from 3.52% recorded in the same quarter the previous year. Furthermore, the net NPA for the quarter stood at a commendable 0.64%, a substantial improvement from 0.80% on a year-on-year basis. This remarkable achievement underscores SBI’s commitment to maintaining a healthy loan portfolio.
Operational Profits and Provision Coverage
Operating profit for Q2FY24 is reported at Rs 19,417 crores, representing a YoY decline of 8.07%. However, it’s important to note that SBI’s Provision Coverage Ratio (PCR) remains strong at 75.45%, despite a decline of 248 basis points (bps) compared to the previous year. This demonstrates the bank’s prudent approach to provisioning for potential loan losses.
Digital Acquisition of Accounts
SBI continues to embrace digitalization, with 61% of savings bank accounts and 39% of retail asset accounts being acquired through YONO, the bank’s digital platform. This digital transition aligns with SBI’s efforts to provide convenient and efficient banking solutions to its customers.
Improved Capital Adequacy Ratio (CAR)
As of the end of Q2FY24, SBI’s Capital Adequacy Ratio (CAR) has improved by 77 bps compared to the previous year and currently stands at 14.28%. This increase indicates the bank’s strengthened financial position and its ability to support its growth initiatives.
