Bombay, May 18
State Bank of India reported an 83% year-on-year (year-on-year) rise in its fourth-quarter standalone net profit to ₹16,695 crore, beating Street expectations. This is the bank’s highest quarterly net profit, although the quality of its assets has improved further.
Profitability was driven by robust growth in net interest income and other income, and a sharp decline in provisions, including towards non-performing assets/NPA. The bank reported a net profit of ₹9,114 crore in the prior year period.
Net income in the report increased approximately 18% sequentially. The bank had recorded a net profit of ₹14,205 crore in the previous quarter. Brokerage firms expected India’s largest bank’s net profit to rise by around 66%.
The bank’s board declared a dividend of ₹11.30 per share (1130%) for the financial year ending March 31, 2023.
Dinesh Kumar Khara, Chairman, said for the third consecutive quarter the bank posted its highest ever quarterly net profit.
“For the full year, our net profit crossed the all-time high of ₹50,000 crore (up 58.58% YoY to ₹50,232 crore), which is the highest ever recorded by a bank in India,” he said.
Gaurav Jani, Research Analyst, Prabhudas Lilladher (PLe) said the net profit of ₹16,700 crore exceeded expectations (by ₹15,400 crore) thanks to lower provisions and tax rate (21, 6% against 27% in the third quarter).
Net interest income rose 29% year-on-year to ₹40,393 crore (₹31,198 crore) on improved yields and continued credit drawdown.
Other income, comprising fee-based income, treasury income and other non-interest income, increased by 18% year-on-year to ₹13,961 crore (₹11,880 crore).
Provisions (other than tax), including towards NPAs, decreased by 54% year-on-year to ₹3,316 crore (₹7,237 crore).
The bank’s gross NPA position improved to 2.78% of gross advances from 3.14% in the prior quarter. This is the lowest level for more than 10 years.
Jani said operating expenses were a failure and rose 22% sequentially to ₹29,700 crore (PLe estimate of ₹25,900 crore) due to both higher employee expenses and other expenses.
Shares of SBI closed at ₹574.15 each, down 2.11% from the previous close on BSE.