E-Paper
SBI continues to gain after lender posts 80% growth in Q4 net profit
SBI reported an 80.15 per cent jump in its standalone profit after tax (PAT) of ₹6,451 crore in the three months to March 2021 over higher interest income and lower provisioning for bad loans.
State Bank of India (SBI) on Monday continued to hold gains and brokerages have raised their price targets after the country’s largest lender by assets reported its quarterly results last week. SBI shares were at ₹411.90 up 10.70 or 2.67 per cent on NSE at 10:25AM and ₹411.95 or up 10.85 or 2.71 per cent on BSE at 10:26AM. SBI’s shares gained 5 per cent on Friday after the company reported an 80 per cent surge in standalone net profit for the fourth quarter ended March 2021.
The stock rallied 4.30 per cent to close at ₹401.10 on the 30-share BSE on Friday. During the day, it jumped 5.16 per cent to ₹404.40. It gained 5.05 per cent on NSE to close at ₹404. The company's market valuation zoomed ₹14,771.17 crore to ₹3,57,966.17 crore on BSE. In traded volume terms, 94.17 lakh shares were traded at BSE and more than 19.28 crore units at NSE during the day.
On Friday, SBI reported an 80.15 per cent jump in its standalone profit after tax (PAT) of ₹6,451 crore in the three months to March 2021 over higher interest income and lower provisioning for bad loans. The lender posted a profit after tax of ₹3,581 crore in the same quarter of FY20. For the full year, its standalone PAT grew by 41 per cent to ₹20,410 crore as against ₹14,488 crore in FY20.
"We have further consolidated our performance in the previous quarter (Q4 FY21) both in terms of profitability and asset quality. We have been able to deliver consistent improvement in all the areas of profitability despite the disruptions caused by the pandemic," Dinesh Khara, SBI’s chairperson, told reporters.
Net interest income for the quarter ended March 2021 increased by 18.89 per cent to ₹27,067 crore from ₹22,767 crore in the year-ago period. Domestic net interest margin (NIM) improved by 17 basis points (bps) to 3.11 per cent from 2.94 per cent. Gross non-performing assets (GNPAs) improved to 4.98 per cent from 6.15 per cent and net NPA stood at 1.15 per cent as against 2.23 per cent. "Our gross NPA ratio has come down to below 5 per cent now which is the lowest in five years. Going forward, we do not see any concern on asset quality front and we expect the trend to continue," Khara said.
SBI’s loan loss provision declined 16.64 per cent to ₹9,914 crore from ₹11,894 crore. Fresh slippages during the quarter stood at ₹21,934 crore and slippages ratio for FY21 declined to 1.18 per cent from 2.16 per cent as at the end of FY20. Recoveries and upgradation were at ₹4,329 crore. The bank's capital adequacy ratio (CAR) improved by 68 bps y-o-y to 13.74 per cent as of March 2021.
SBI’s total deposits grew at 13.56 per cent y-o-y, out of which current account deposit grew by 27.36 per cent while saving bank deposits rose by 14.79 per cent. Domestic credit growth stood at 5.67 per cent y-o-y, mainly driven by retail (personal) advances (16.47 per cent), SME (4.24 per cent) and agricultural advances (3.92 per cent).
The sharp rise in Covid-19 cases in recent times and the restricted lockdowns in many places have slightly decelerated the pick-up in the economy, Khara said. He said with the improvement in vaccination coverage, the recovery in economic activity is expected in the next two to three months. He added that the bank is looking at a loan book growth of 10 per cent in the current financial year. SBI intends to create a Covid-19 loan book of ₹10,000 crore for the healthcare sector, Khara said.
Equity benchmark Sensex rallied over 300 points in opening trade on Monday, tracking gains in index majors HDFC twins, SBI and ICICI Bank amid mixed cues from global markets. Sensex rose 975.62 points or 1.97 per cent in the previous session, to finish at 50,540.48, and Nifty soared 269.25 points or 1.81 per cent to close at 15,175.30.
(With PTI inputs)
