SBI asset quality, NII improve in Q3

State Bank of India (SBI), which reported on Friday the highest quarterly profit of Rs 3,955 crore in seven years, has shown remarkable improvement in the non-performing assets, keeping slippages under check.

It is the second consecutive quarter that the bank is has stayed profitable.

As the non-performing assets (NPAs) came down, the bank had to set aside less money for bad loans. The provisions for NPAs dropped 21.3% to Rs 13,971 crore from a year ago. Recovery in written-off accounts saw growth of 55.98% over the previous year to Rs 2,107 crore at the end of the December quarter.

SBI chairman Rajnish Kumar said, “The profits are a reflection of an all-around improvement in performance of the bank. The slippages are under control. There is a remarkable improvement in the non-performing assets.”

The gross non-performing assets (NPAs) of the bank at the end of the third quarter were down to Rs 1,87,765 crore, forming just 8.71% of its advances. Total NPA reduction this quarter was Rs 24,641 crore, helped in part by write back from the accounts the bank referred to the National Company Law Tribunal (NCLT). Four accounts from the NCLT list that RBI had referred to the banks saw recoveries of 67%.

Domestic advances were up 15.65% over the previous year to Rs 18.79 lakh crore led by strong growth in the retail loans and corporate loans. Higher credit growth, better spreads and lower slippages led to the domestic net interest margins rising to 2.97% at the end of the third quarter.

Among advances, corporate loans posted the strongest growth, riding on demand from government bodies and public sector undertakings (PSUs). This came after after a period of de-growth and some quarters of stagnant growth.

Corporate loans grew 20.67% to Rs 7,74,715 crore at the end of Q3 with most of the demand coming from power public sector units, which contributed to Rs 27,637 crore of growth, of which Rs 18,270 crore was for government expenditure on road and ports.

State Bank of India