State Bank of India has reported profit at Rs 3,955 crore for October-December quarter, driven by sharp fall in provisions and NII growth.
The country's largest lender had posted a loss of Rs 2,416.4 crore in same quarter last year. Sequentially the profit increased by a whopping 318.5 percent or 4-fold.
Net interest income during the quarter grew by 21.4 percent year-on-year to Rs 22,691 crore with loan growth of 12.1 percent YoY and 4.6 percent QoQ. NII growth was driven by lower slippages and lower funding cost.
Domestic net interest margin expanded to 2.97 percent at the end of December quarter against 2.92 percent as of September driven by higher credit growth, better spreads and lower slippages, SBI said.
Numbers were ahead of a CNBC-TV18 poll estimates of Rs 3,318 crore for profit and Rs 21,902 crore for NII. The bank improved its asset quality performance. Gross non-performing assets (NPA) as a percentage of gross advances were lower at 8.71 percent for the quarter against 9.95 percent in previous quarter.
Also read- Q3FY19 Results of all Public & Private Sector banks in India
Also read- Q3FY19 Results of all Public & Private Sector banks in India
Net NPA as a percentage of net advances, too, were lower at 3.95 percent for the quarter against 4.84 percent in September quarter. In absolute term, gross NPAs dipped to Rs 1,87,764.6 crore, down 8.8 percent and net NPAs fell 14.6 percent to Rs 80,943.5 crore compared to year-ago due to decline in slippages.
SBI said fresh and gross slippages for the quarter stood at Rs 4,523 crore and Rs 6,541 crore, declined sharply against Rs 10,725 crore and Rs 10,888 crore reported in September quarter while recoveries & upgrades were higher at Rs 6,617 crore against Rs 4,327 crore in earlier quarter.
The largest lender further said that large infra group exposure is still tagged as 'Standard' as of December 31, 2018. Provisions and contingencies fell sharply at Rs 6,006 crore in quarter ended December 2018 against Rs 12,092 crore in September quarter and Rs 18,876 crore in same period last year.
However, provisions for non-performing assets were sharply higher at Rs 13,971 crore for the quarter against Rs 10,184.5 crore in Q2FY19, but declined against Rs 17,759.7 crore reported in corresponding period last fiscal.
The bank also reported increase in its provision coverage ratio at 74.63 percent, from 70.7 percent in previous quarter.
SBI purchased loan portfolio from NBFCs worth Rs 13,000 crore till December 2018 and is expected to buy more portfolio worth Rs 7,000 crore going ahead.
Other income (non-interest income) fell 0.6 percent year-on-year to Rs 8,035 crore mainly on account of decline in trading income by 58.56 percent YoY. Operating profit increased 7.4 percent to Rs 12,625 crore in Q3 driven by healthy growth in net interest income and lower growth in overhead expenses YoY.
Consolidated profit of the bank, which include income from its subsidiaries, was at Rs 4,709.15 crore for the December quarter against loss of Rs 1,886.6 crore in year-ago period, but sequentially the same showed a 8-fold increase.
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