SBI Q4 results: India’s largest lender posts record quarterly net profit of ₹16,695 crore, up 83% YoY

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SBI Q4 results: India’s largest lender posts record quarterly net profit of ₹16,695 crore, up 83% YoY
This is the third consecutive quarter of an all-time-high standalone quarterly net profit for SBIBCCL
  • This is the third consecutive quarter of an all-time-high standalone quarterly net profit for SBI.
  • Asset quality improvements and a fall in provisions helped SBI beat analyst estimates in terms of profitability.
  • The lender also declared a dividend of ₹11.3 per share.
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State Bank of India (SBI) on Thursday posted its highest-ever standalone quarterly net profit of ₹16,695 crore in Q4, registering a growth of 83% on year and beating analyst estimates. Asset quality improvements and a fall in provisions helped India’s largest lender post a record profit.

This is the third consecutive quarter of record profit for SBI – in the December quarter, the lender posted a standalone net profit of ₹14,205 crore, and ₹13,265 crore in the September quarter.

For FY23, SBI’s net profit grew 59% to ₹50,232 crore.

SBI’s net interest income (NII) grew 29% YoY to ₹40,393 crore in the March quarter, while for FY23, NII stood at ₹1.45 lakh crore, growing by 20%.

The lender’s net interest margin (NIM) saw improvements on a quarterly as well as annual basis – during Q4, SBI’s NIM rose 44 basis points to 3.84%, while for the full FY23, its NIM came in at 3.58%, rising by 22 basis points.

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100 basis points make up a percent.

NIM is a measure of how much a bank is earning as interest income from its customers versus how much it is paying on deposits.

Pre-provisioning operating profit (PPOP), or operating profit, in Q4 stood at ₹24,621 crore, up 25% YoY. For the full year, PPOP came in at ₹83,713 crore, up 11%.

Asset quality witnessed an improvement, too, with gross non-performing assets (NPA) at 2.78% in Q4, significantly down from 3.97% a year ago. Net NPA also moderated to 0.67% as against 1.02% a year ago.

Aiding the bottomline was a decline in provisions on both quarterly as well as annual basis. In Q4 FY23, loan loss provisions stood at ₹1,278 crore, down from ₹3,262 crore a year ago. Similarly, for FY23, loan loss provisions declined to ₹9,144 crore, from ₹14,087 crore in FY22.

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Alongside provisions, the slippage ratio fell in FY23 to 0.65%, from 0.99% in FY22. Slippage ratio refers to the rate at which a fresh loan becomes stressed, so a decline in this ratio is a positive development.

SBI declared a dividend of ₹11.3 per share, with the record date set as May 31.

SBI’s Q4 and FY23 in numbers:

ParticularsFY23FY22Q4 FY23Q4 FY22
Total income₹3.69 lakh crore₹3.16 lakh crore₹1.07 lakh crore₹82,613 crore
Net interest income₹1.45 lakh crore₹1.21 lakh crore₹40,393 crore₹31,198 crore
Pre-provisioning operating profit₹83,713 crore₹75,292 crore₹24,621 crore₹19,717 crore
Net profit₹50,232 crore₹31,676 crore₹16,695 crore₹9,114 crore
Net interest margin3.58%3.36%3.84%3.40%
Net NPA0.67%1.02%0.67%1.02%

Source: Company reports

Loan growth outpaces deposit growth


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Like many of its peers in the banking sector, SBI too reported faster growth in loans when compared to deposits. In Q4, SBI’s loan book grew at 15.99% YoY to ₹32.69 lakh crore, while deposits grew at a much slower pace of 9.19% YoY to ₹44.24 lakh crore.

Rising interest rates also reflected in the bank’s cost of deposits, which increased 16 basis points YoY to 3.99%. The cost of deposits has increased for the fourth consecutive quarter.

Retail loan growth outpaced corporate loans, rising 17.64% YoY to ₹11.79 lakh crore in Q4, while corporate loans grew at 12.52% to ₹9.8 lakh crore. Home loans grew at 14.07% to ₹6.41 lakh crore during this period.

SBI’s shares fell 2% to close at ₹574 apiece on Thursday.

$SBIN.NSE The stock has been trading in a tight range for the last three weeks due to earnings scheduled today. Post earnings, it reacted wildly and settled down. A decisive weekly close above Rs.588 will be positive and can test the previous high. Rs.567 is a vital support. Stay positive as long as it holds.

— (@brahma_chary) May 18, 2023

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