SBI Posted a Record Profit of Rs 16,884 Crore in Q1 FY24 and Improved its NPA Ratio

SBI Q1 FY24 Highlights: Record Profit, Lower Provisions, Higher NIM and Improved NPA Ratio

State Bank of India (SBI), the largest public sector bank in the country, reported a stellar performance in the first quarter of the financial year 2024, with a net profit of Rs 16,884.29 crore, a whopping 178.25% increase from Rs 6,068.08 crore in the same period last year.

The bank’s total income also rose by 44.07% year on year (YoY) to Rs 1,08,038.83 crore in the quarter ended 30 June 2023, driven by robust growth in advances and deposits.

SBI’s profit before tax (PBT) jumped by 172.67% YoY to Rs 22,795.62 crore in Q1 FY24, compared to Rs 8,360.18 crore in Q1 FY23.

The bank’s net interest income (NII), which is the difference between interest earned and interest expended, declined by 3.68% YoY to Rs 38,905 crore during the quarter. However, the net interest margin (NIM), which is a key indicator of profitability, improved to 3.47% in Q1 FY24 from 3.23% in Q1 FY23, reflecting the bank’s efficient management of cost of funds.

SBI’s operating profit, which is the profit before provisions and contingencies, surged by 98.37% YoY to Rs 25,297 crore in the quarter ended 30 June 2023, as against Rs 12,753 crore posted in the corresponding quarter last year. This was mainly due to lower operating expenses and higher non-interest income.

The bank’s provisions and contingencies (other than tax) tumbled by 43.05% to Rs 2,501.31 crore in Q1 FY24 from Rs 4,392.38 crore posted in Q1 FY23, indicating lower stress on asset quality.

The bank’s provision coverage ratio (PCR), which measures the extent of provisioning against bad loans, improved by 135 basis points (bps) YoY to 74.82%. The PCR (including AUCA), which also covers written-off assets, stood at 91.41%.

The bank’s return on assets (ROA) and return on equity (ROE), which measure the efficiency and profitability of the bank, stood at 1.22% and 24.42% respectively for the quarter, showing a significant improvement from the previous year.

The bank’s asset quality also improved during the quarter, as the gross non-performing assets (NPAs) slipped to Rs 91,328 crore as on 30 June 2023 as against Rs 90,928 crore as on 31 March 2023 and Rs 1,13,272 crore as on 30 June 2022.

The ratio of gross NPAs to gross advances stood at 2.76% as on 30 June 2023 as against 2.78% as on 31 March 2023 and 3.91% as on 30 June 2022.

The ratio of net NPAs to net advances stood at 1% as on 30 June 2023 as against 0.67% as on 31 March 2022 and 0.71% as on 30 June 2022.

The bank’s total deposits grew by 12% to Rs 45,31,237 crore as on 30 June 2023 as against Rs 40,45,696 crore as on 30 June 2022, out of which CASA Deposit grew by 5.57% YoY. CASA ratio slipped to 42.88% as on 30 June 2023.

The bank’s credit growth stood at 13.90% YoY. Domestic advances grew at 15.08% YoY and Foreign Offices’ advances rose by 7.44% YoY.

The bank’s capital adequacy ratio (CAR), which measures the capital buffer available to absorb losses, improved by 113 bps YoY and stood at 14.56% as at the end of Q1 FY24; slippage ratio was at 0.94%, improved by 44 bps YoY while credit cost reduced by 29 bps YoY to 0.32%.

SBI is an Indian multinational, public sector banking and financial services statutory body. As of 30 June 2023, the Government of India held 57.47% stake in the bank.

The stock price of SBI fell by 2.66% to Rs 574.90 on the BSE on Friday, 04 August 2023.