SBI net falls 4.2% to `6,257 cr in Q3

Mumbai: The country's largest lender SBI on Thursday reported a 4.20 per cent decline in consolidated December quarter net at Rs 6,257.55 crore, largely because of a higher base in the year-ago period where it had benefitted from a Rs 4,500 crore one-off income.

On a standalone basis, the city-headquartered lender's net profit came in at Rs 5,196.22 crore as against Rs 5,583.36 crore in the year-ago for the same period and Rs 4,574.16 crore in the preceding September quarter. SBI Chairman Dinesh Kumar Khara told reporters that the year-ago period had seen the resolution of the Essar Steel loans, resulting in an over Rs 4,000 crore interest income and Rs 500 crore other income benefit. For the reporting quarter, its core net interest income grew 3.75 per cent to Rs 27,779 crore on the back of a 6.73 per cent credit growth and a 0.21 per cent contraction in the net interest margin to 3.12 per cent. The bank, which controls over a fifth of the overall system, witnessed a healthy growth of over 15 per cent in retail advances. These loans now constitute 61 per cent of the overall book. Khara said core personal loans are at 39 per cent of the book and the bank sees its share growing to 45 per cent in a year. He said the bank has preferences like salaried and new to credit customers while making its choices, and will continue to grow this book without compromising on risk.

Its other income grew marginally for the quarter at Rs 9,246 crore as against Rs 9,106 crore in the year-ago period. From an asset quality perspective, its proforma slippages - loans which would have to be classified as gross non-performing assets but for the Supreme Court's standstill order - stood at Rs 16,461 crore.

It received applications of Rs 18,125 crore of assets to be recast under a special dispensation introduced by the RBI. Khara said the overall slippages and restructuring number stands at Rs 41,216 crore as of the nine-months ended December and the bank is confident of meeting its guidance of containing this number at Rs 60,000 crore for FY21. From a credit cost perspective, Khara said it set aside money as provisions for the proforma slippages at the same level as that for regular NPAs. It set aside Rs 2,071 crore for proforma slippages, Rs 814 crore for restructuring applications and added Rs 3,000 crore to take the general Covid-19 contingency to Rs 6,008 crore.

Its overall provisions and contingencies stood at Rs 10,342 crore as compared to Rs 7,252 crore in October-December 2019. The reported gross NPA ratio was at 4.77 per cent as against 6.94 per cent last year, and would have still seen an improvement to 5.44 per cent if not for the apex court order.