SBI Q3 Results: Net interest income falls short, asset quality holds steady
State Bank of India Ltd. (SBI), India’s largest lender, reported its financial results for the October-December period on Thursday, February 6. The bank’s core income, or Net Interest Income (NII), rose by 4.1% year-on-year to ₹41,446 crore. However, this fell short of the ₹42,592 crore expected by a CNBC-TV18 poll.
Despite this, SBI’s net profit for the quarter stood at ₹16,801 crore, marking an impressive 84% growth compared to last year. This exceeded analysts’ expectations, which had forecasted a net profit of ₹16,099 crore.
SBI’s asset quality remained stable. The bank’s Gross NPA ratio improved slightly, standing at 2.07% for the December quarter, compared to 2.13% in the previous quarter. The Net NPA ratio held steady at 0.53%, unchanged from the previous quarter.
The bank’s provisions amounted to ₹911 crore for the quarter, up from ₹688 crore last year. However, this was significantly lower than the ₹4,506 crore set aside in the previous quarter.
SBI posted a 14% growth in loans during the quarter, while deposits increased by 10% compared to the same period last year. However, its Net Interest Margin (NIM) slipped to 3.01%, down from 3.14% in the previous quarter.
During a post-earnings interaction, SBI Chairman CS Setty indicated the bank would see double-digit growth in unsecured personal loans. Setty also mentioned the strength of the corporate loan book, as many corporates have deleveraged and improved their financials.
On the microfinance front, Setty acknowledged that while SBI’s MFI portfolio amounts to ₹10,000 crore to ₹11,000 crore, it remains relatively small. He also noted some stress within the microfinance industry.
Following the earnings release, SBI shares traded 1.8% lower, at ₹752.7.
In conclusion, while SBI delivered strong profit growth, its core income and margin fell short of market expectations. Investors will watch closely how the bank continues to navigate asset quality and growth strategies in the coming quarters.
