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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MP HC sets up judicial commission to probe water contamination in Indore
Indore (PTI): The Indore bench of Madhya Pradesh High Court on Tuesday set up a commission of inquiry comprising a former HC judge to probe the issue of water contamination in city's Bhagirathpura, saying the matter requires probe by an independent, credible authority and "urgent judicial scrutiny".
It also directed the commission to submit an interim report after four weeks from the date of commencement of proceedings.
A division bench of Justices Vijay Kumar Shukla and Alok Awasthi constituted the commission while hearing several public interest litigations (PILs) filed simultaneously regarding the deaths of several people in Bhagirathpura due to the consumption of contaminated water.
The HC reserved the order after hearing all the parties during the day, and released it late at night.
The state government on Tuesday told the HC that the deaths of 16 people in Indore's Bhagirathpura area was possibly linked to a month-long outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The government presented an audit report of 23 deaths from the current gastroenteritis epidemic in Bhagirathpura before the bench, suggesting that 16 of these fatalities may have been linked to the outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The report, prepared by a committee of five experts from the city's Government Mahatma Gandhi Memorial Medical College, stated that the deaths of four people in Bhagirathpura were unrelated to the outbreak, while no conclusion could be reached regarding the cause of death of three other people in the area.
During the hearing, the high court sought to know from the state government the scientific basis behind its report.
The division bench also expressed surprise at the state government's use of the term "verbal autopsy" in relation to the report, sarcastically stating that it had heard the term for the first time.
The HC expressed concern over the Bhagirathpura case, stating that the situation was "alarming," and noted that cases of people falling ill due to contaminated drinking water have also been reported in Mhow, near Indore.
In its order, the HC said the serious issue concerning contamination of the drinking water supply in Bhagirathpura area allegedly resulted in widespread health hazards to residents, including children and elderly persons.
According to the petitioners and media reports, death toll is about 30 till today, but the report depicts only 16 without any basis or record, it said.
It is averred that sewage mixing, leakage in the pipeline, and failure of civic authorities to maintain potable water standards have led to the outbreak of water-borne diseases. Photographs, medical reports, and complaints submitted to the authorities prima facie indicate a matter requiring urgent judicial scrutiny, the HC said.
"Considering the gravity of the allegation and affecting the right to life under Article 21 of the Constitution of India and the need for an independent fact-finding exercise, the Court is of the opinion that the matter requires investigation by an independent, credible authority," it said.
"Accordingly, we appoint Justice Sushil Kumar Gupta, former judge of the Madhya Pradesh High Court, a one-man commission of inquiry into the issues relating to water contamination in Bhagirathpura, Indore, and its impact on other areas of the city," the HC added.
As per the order, the commission shall inquire into and submit a report on the cause of contamination -- whether the drinking water supplied to Bhagirathpura was contaminated; and the source and nature of contamination (sewage ingress, industrial discharge, pipeline damage etc).
The panel will also probe the number of actual deaths of affected residents on account of contaminated water; find out the nature of disease reported and adequacy of medical response and preventive measures; suggest immediate steps required to ensure safe drinking water as well as long-term infrastructural and monitoring reforms.
It will also identify and fix responsibility upon the officers and officials found prima facie responsible for the Bhagirathpura water contamination incident, and suggest guidelines for compensation to affected residents, particularly vulnerable sections.
The commission shall have powers of a civil court for the purpose of summoning officials and witnesses; calling up records from the government department, hospitals, laboratories and civic bodies; ordering water quality testing through accredited laboratories; conducting spot inspections.
All state authorities involving district administration, Indore Municipal Corporation, public health engineering department and Madhya Pradesh Pollution Control Board shall extend full co-operation and provide records as sought by the commission, it said.
The state government shall provide office space, staff, and logistical support to the commission, it said.
During the hearing in the day, the state government also presented a status report to the court in this matter.
According to reports, a total of 454 patients were admitted to local hospitals during the vomiting and diarrhea outbreak, of whom 441 have been discharged after treatment, and 11 are currently hospitalised.
According to officials, due to a leak in the municipal drinking water pipeline in Bhagirathpura, sewage from a toilet was also mixed in the water.
