SBI Q2 net profit jumps 55 % to Rs 5,246 cr as bad loans decline
Mumbai: The country's largest lender State Bank of India (SBI) on Wednesday reported a 55.41 percent rise in consolidated net profit at Rs 5,245.88 crore for the second quarter ended September 30 on account of a decline in bad loans.
The bank's net profit stood at Rs 3,375.40 crore in the July-September quarter of the previous fiscal.
On a standalone basis, the bank's net profit rose nearly 52 percent to Rs 4,574 crore driven by lower provisions and higher growth in net interest income. Its net profit stood at Rs 3,012 crore in the year-ago period.
"Our assessment indicates an upward movement in economic activities. Most companies are suggesting that the activity levels are touching 70-80 percent of the pre-COVID levels. Vehicles registration, including tractors, are increasing. There are signs that the economy is recovering," the bank's chairman Dinesh Khara told reporters.
Net interest income grew 14.56 percent to Rs 28,181 crore during the quarter as against Rs 24,600 crore last year.
Domestic net interest margin for the quarter stood at 3.34 percent as compared to 3.22 percent a year ago.
The lender has received one-time restructuring applications worth Rs 6,495 crore so far and has provided Rs 650 crore for it. Of this, Rs 2,400 crore is from the retail book and the rest from the corporate book.
"Of the Rs 2,400 crore, it is predominantly MSME (micro, small and medium enterprises). Retail per se is only 2,600 people have applied for the restructuring of personal loans and home loans only 4,291 people have applied for a recast," the bank's managing director (retail and digital banking) C S Setty said.
"Together personal and home loan constitute Rs 1,300 crore and the rest is coming from about 35,000 MSMEs," Setty added.
In the corporate segment, the lender has received restructuring requests from 42 customers who account for about Rs 4,000 crore of loans.
Khara expects additional restructuring of Rs 13,000 crore up to December 2020.
"It may not be so, but it is a very liberal estimate which we have taken," he said, adding that request for restructuring would largely come from corporates and a bit from MSMEs.
The bank's gross non-performing assets (NPAs) ratio stood at 5.28 percent as against 7.19 percent a year ago. Net NPAs improved to 1.59 percent compared to 2.79 percent.
Total provision declined 21.74 percent to Rs 11,886 crore during the quarter from Rs 15,187 crore in the corresponding quarter of the previous year.
The provision coverage ratio (PCR) improved to 88.19 percent, while fresh slippages stood at Rs 2,756 crore.
"When it comes to slippages in various sectors, I would like to mention that fresh slippages are more in the agriculture sector and also in the SME sector. In SME, we have been successful in pulling back to a greater extent. Corporate slippages have come down significantly," Khara said.
The bank has estimated Rs 20,000 crore of slippages during the second half of the current fiscal.
Its collection efficiency for domestic loan book (excluding agriculture segment) stood at 97 percent at the end of Q2 FY21.
Total deposits grew 14.41 percent year-on-year, out of which current account deposits grew 8.55 percent, while saving bank deposits grew by 16.28 percent.
Credit growth stood at 6.02 percent, mainly driven by retail (personal) advances (14.55 percent).
"Retail will continue to be our major lever for growth going forward as well," Khara said.
The lender expects credit growth in FY21 to be at 8-9 percent.
Capital Adequacy Ratio (CAR) improved by 113 basis points year-on-year to 14.72 percent at the end of September 2020.
Shares of SBI on Wednesday closed 1.12 percent higher at Rs 207.05 apiece on the BSE.
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Tata-Airbus helicopter facility shining example of partnership in high-end manufacturing: Rajnath
Kolar (Karnataka) (PTI): Defence Minister Rajnath Singh on Tuesday said the investment into H-125 helicopter programme is "anticipated" to cross Rs 1000 crore, and create a number of jobs, and called it a "shining example" of mutually beneficial partnership with friendly countries in high-end manufacturing sector.
He was speaking at the inaugural ceremony of the final assembly line of H-125 helicopters here.
Prime Minister Narendra Modi and French President Emmanuel Macron virtually inaugurated the Airbus H125 light utility helicopter Final Assembly Line at Tata‑Airbus' facility at Vemagal Industrial Area in this district from Mumbai.
Singh, accompanied by his French counterpart Catherine Vautrin, congratulated Tata Advanced System and Airbus Helicopters on the inauguration of the project and recalled their earlier association as well.
"This project is a shining example of mutually beneficial partnership with friendly countries in high-end manufacturing sector," Singh said.
"The H-125 program investment is anticipated to exceed Rs 1000 crore and is likely to create direct and indirect employment opportunities for our skilled and hard working younger generation," he said.
Renowned for its exceptional reliability, versatility, and outstanding performance under diverse operating conditions, the H-125 has proven to be one of the most effective and trusted single-engine helicopters globally, he said.
He recalled that Tata Advanced Systems and Airbus had earlier joined hands for a project in Gujarat's Vadodara for the C-295 aircraft, which he described as a symbol of how Tata in particular and India in general can collaborate with international OEMs to contribute to the vision of a stronger India.
The Defence minister said "Make in India" and self-reliance have been the cornerstone of India's economic policy since 2014.
Singh recalled that this policy initiative was launched by PM Modi, under which India is committed to achieving self-reliance in critical technology and the manufacturing of high-end products and equipment through mutually beneficial partnerships.
"For more than a decade, India has been charting industrial development through large-scale infrastructure building, capital infusion in important sectors through a number of incentive schemes on the one hand, and providing a level playing field for facilitating investment on the other," he said.
He added that it has also been the government's focus to support small and medium industries and strengthen the startup ecosystem in particular. Overall, the focus has been on holistic industrial development, which not only caters to domestic demand but also addresses the needs of other countries.
Highlighting reforms in the defence sector, Singh said these measures have augmented the contribution of the private sector in the defence industrial ecosystem.
According to him, historically, Indian defence production was largely public sector-oriented due to requirements of high capital investment and long gestation periods, resulting in the private sector's contribution being far less than desired.
However, with reforms such as the corporatisation of ordnance factories, establishment of defence industrial corridors, and other initiatives to raise the private sector's share in total defence production, it now stands at almost a quarter of the country's total defence production.
Defence exports have also increased manifold, placing India among the top exporters in the world, he said.
Singh said the growth trajectory has given a massive boost to MSMEs and ancillary sectors, which have grown to more than 16,000 in number, with many foreign companies sourcing components from Indian MSMEs.
He invited companies to deepen the partnership through meaningful technology transfer and offer platforms to meet the security needs of other countries as well.
Union Civil Aviation Minister K Rammohan Naidu, who also attended the event said the H125 final assembly line set up by Tata and Airbus marks a defining moment for India's aerospace sector, calling it "a proud symbol of rising confidence in India's high-precision aerospace capabilities."
He described defence and civil aviation as "two strategic pillars of the Indo-French partnership" and said the new facility would reinforce "a single integrated aerospace ecosystem" by assembling both civil and defence variants.
Noting that India has risen from the 10th to the third largest civil aviation market in just 11 years, Naidu asserted that the country now has "the market, the export potential, the policy ecosystem, the skilled workforce and the strategic global partnerships to emerge as a rotary-wing manufacturing hub".
"The future of rotary aviation in South Asia will be designed, manufactured, certified, maintained and exported from India," he said, adding that the country is "not just flying high, but flying past all horizons" under the Make in India and Viksit Bharat 2047 visions.
Tata Advanced Systems CEO and MD Sukaran Singh said in this facility here, "we will start building helicopters without any government or defense orders."
"However, we will be ready to supply the defense forces as and when they want. The first helicopter will fly out this facility by mid 2027."
