SBI posts stellar earnings in Q2FY22
State Bank of India (SBI) has reported robust earnings for the quarter ended September 2021.
The largest bank saw its net profit rising by a whopping 67% to Rs 7,627 crore in Q2FY22, aided by a healthy growth in net interest income and a sharp fall in provisions/credit cost. Is was also benefitted from robust retail demand for loans.
Net profit was Rs 4,574 crore in the September quarter last year.
Total advances climbed 6%, driven by personal loans that expanded 15%.
An 11% growth in home loans more than helped mask a 4% shrinkage in the corporate loan book. Home loans now constitute 24% of the bank’s domestic advances.
SBI’s management is confident of matching the broader growth momentum, which should also boost the corporate loan book. India’s largest lender by assets expects to expand its loan book by 10% this fiscal.
A sharp fall in provisions also helped the bank enhance its net profit. Provisions more than halved to Rs 2,699 crore, from Rs 5,619 crore a year ago due to improvement in loan collections, a fall in slippages and a write-back from the provisions made for Dewan Housing Finance (DHFL).
Slippages fell sharply to just Rs 4,176 crore in September 2021 from Rs 15,666 crore in the quarter ended June 2021 as collection efficiency in retail loans improved to 95% after an end to mobility curbs. Net NPA ratio fell to 1.52%, down from 1.59% a year ago, while the slippage ratio fell sharply to 0.66%, down from 2.47% in June 2021, resulting in a 51-basis point fall in credit costs year-on-year. One basis point is 0.01 percentage point.
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