SBI Q2 Results: One-time gains aid profit growth; Credit costs better than expectations

India's largest lender State Bank of India

Ltd. (SBI) reported results on Tuesday, November 4, which were better, when compared to the CNBC-TV18 poll on most fronts.

SBI's Net Interest Income (NII) or core income increased by 3% on a year-on-year basis to ₹42,985 crore. A CNBC-TV18 poll was working with a figure of ₹40,766 crore.

Net profit for the quarter also increased by 10% from the same quarter last year to ₹20,160 crore. The number was higher than the ₹17,048 crore that the street was anticipating.

The improvement in profitability also came due to a couple of one-time elements during the quarter. The one-time gain during the quarter came from SBI’s stake sale in Yes Bank, which contributed to ₹4,593.22 crore, and its stake in Jio Payments Bank, which was worth ₹25.46 crore.

Asset quality for the lender remained stable on a quarter-on-quarter basis. Gross NPA for the quarter stood at 1.73% from 1.83% in June, while Net NPA stood at 0.42% from 0.47% in the previous quarter.

In absolute terms, SBI's Gross NPA improved to ₹76,243 Crore from ₹78,039.7 Crore in June, while its Net NPA improved to ₹18,460 Crore from ₹19,908 Crore in June.

SBI's slippages improved to ₹4,754 crore at the end of the September quarter, compared to ₹7,945 crore in June, while recoveries and upgrades stood at ₹2,279 crore at the end of the September quarter, compared to ₹3,253 crore in June and also better than the ₹2,600 crore figure last year.

Shares of SBI are witnessing volatile moves after the results were announced. The stock currently trades little changed at ₹949.6.