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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Congress government in Karnataka sat on evidence against Prajwal Revanna: Union minister Sitharaman
Pune, May 4: Union Finance Minister Nirmala Sitharaman on Saturday claimed that the Congress government in Karnataka did not take action against JD(S) leader Prajwal Revanna, accused of sexually abusing women, for about a year despite being aware of the matter.
The Congress was afraid that it might lose Vokkaliga votes and therefore stayed silent until the first phase of the Lok Sabha elections got over, she said, speaking at a meeting with select journalists here.
"The Union home minister (Amit Shah) has made it very clear that we will not tolerate the matters that go against women and on that we stand united. Though the (BJP's) alliance partner has this issue, we have made it clear that it was not acceptable, and let it be investigated," Sitharaman said, when asked if the scandal will have an impact on her party's performance in Karnataka in the ongoing elections.
It was being claimed that a driver gave a pen drive (allegedly containing evidence of Revanna's acts) to the Congress party and state home minister but they were sitting on this evidence for about a year, and "now the BJP is made to answer because the JD(S) is in alliance with us," she said.
The ministers of the Congress government knew what was in the pen drive but they did not think that safety of women should be their priority, Sitharaman alleged.
"They thought the Vokkaliga votes might go from their hands and decided to remain silent till the time the first phase of Lok Sabha got over. Now they are making it a big issue and pushing it which is typical of Congress and it shows their hypocrisy," the BJP leader further said, asking why probe was delayed for one year.
The Karnataka government was now writing to the prime minister about the case, asking him to issue look-out notices against Prajwal Revanna and bring him back from abroad, but the Union home minister had clearly said that the Karnataka government can take all the action it wants to take, she said.
Asked about BJP MP Brij Bhushan Sharan Singh's son Karan Singh getting ticket from the party for Kaiserganj constituency in Uttar Pradesh, Sitharaman said the allegations against the MP had not been proved yet.
Brij Bhushan Sharan Singh is accused of sexually harassing women wrestlers.
"Nothing is proven against Brij Bhushan....even if he is convicted, I would say you want to carry the blame to the son. Even convicted people's children have been entertained by so many parties," the Union minister said.
The BJP was still confident after two phases of the Lok Sabha elections of winning 370 seats on its own and 400 seats along with its NDA allies, she said.
Asked if the BJP was in defence mode and responding to the opposition's narrative instead of setting its own, Sitharaman said this was not the case.
"Our response to the Congress' manifesto is not defensive, nor is it negative, rather it is more offensive and substantive," she said, adding that the manifesto was more of a Muslim League document.
Later, in an interaction with students at an event at Deccan College in the city, Sitharaman talked about the Rohith Vemula case where the Telangana police have filed a closure report before a local court stating that the University of Hyderabad student was not a Dalit, and he died by suicide in 2016 as he feared that his "real caste" would be discovered.
The issue was dragged to the streets without allowing the university to handle it with sensitivity, the Union minister said.
"It was an unfortunate incident. It was dragged to the streets and a narrative was built that the government was suppressing (facts) and was against students and SCs. Today, the same people who dragged the unfortunate family of Vemula on the street, should stand up before the entire country and apologise for having politicised it," she said.
