SBI Q2 Results: Slippages moderate from June quarter, Margin improves; Loan growth strong

State Bank of India Ltd.

, India's largest lender, reported results for the September quarter that were higher than analyst expectations across parameters.

Net Interest Income for India's largest lender grew by 14.7% from the year-ago quarter to ₹49,143 crore. A CNBC-TV18 poll was working with a figure of ₹47,901 crore.

Net profit for the period stood at ₹23,037 crore, higher than the CNBC-TV18 poll figure of ₹22,859 crore. On a year-on-year basis, SBI's profit grew 14.3%. The profitability for the quarter was aided by a ₹7,290 crore exceptional gain, which arose from the SBI Funds stake sale.

SBI's asset quality remained stable on a sequential basis. Gross NPA stood at 1.39% from 1.47% in June, while Net NPA improved to 0.36% from 0.38% in the previous quarter. On an absolute basis, SBI's Gross NPA stood at ₹72,529 crore, while Net NPA stood at ₹18,546 crore. During the June quarter, the gross and net NPA figures stood at ₹74,272 crore and ₹19,158 crore respectively.

Retail NPAs at the end of the September quarter stood at 2.06% from 2.16% in June. Every category, Agri, Personal, and SME NPAs within the retail segment, saw stable asset quality, with marginal improvement on a sequential basis. Corporate NPAs also improved from the last quarter.

Provisions for the quarter stood at ₹4,216 crore compared to the ₹5,046 crore reported in the June quarter. Fresh slippages during the quarter stood at ₹5,227 crore, which is better than the ₹7,046 crore reported during the June quarter.

For the quarter, Net Interest Margin (NIM) on a whole bank basis stood at 2.94%, an improvement of eight basis points sequentially, while domestic NIM at 3.11% was 11 bps better than the June quarter. On a year-on-year basis, the margins improved by 3 basis points.

Gross advances during the quarter stood at ₹52 lakh crore, a growth of 17.8% on a year-on-year basis. SME and Agri advances both grew by 22% from last year. Deposits at the end of the quarter stood at ₹63 lakh crore, a growth of 12.2% from last year. The loan growth figure is higher than the 14% to 15% growth guided for by the management for the full year.

Shares of State Bank of India are trading 0.6% higher after the results announcement, cooling slightly from the highs of the day at ₹993.8. The stock is flat on a year-to-date basis.