State Bank of India (SBI) Reports 8% YoY Growth in Q2 Net Profit

State Bank of India (SBI) Reports 8% YoY Growth in Q2 Net Profit

Mumbai, India, Nov 4: India’s largest commercial bank, State Bank of India (SBI), released its financial results for the July-September quarter, reporting an 8% year-on-year increase in net profit. The bank’s strong performance was driven by healthy core lending income and robust loan growth, as it seeks to navigate the dynamic financial landscape.

Key Highlights:

1. Profit Growth: SBI’s net profit surged from ₹13,264.5 crore in Q2 FY23 to ₹14,330 crore during the quarter under review. This 8% year-on-year growth exceeded analysts’ estimates.
2. Net Interest Income (NII): The bank’s NII showed impressive growth, increasing by 12.3% compared to the same period last year, reaching ₹39,500 crore. NII is the difference between a bank’s interest earned and interest paid.
3. Other Sources of Income: SBI also witnessed a substantial 21.6% growth in other sources of income, amounting to ₹10,790 crore.
4. Loan and Deposit Growth: SBI’s loan portfolio expanded by 12.4% year-on-year, reflecting the rising demand for credit, supported by increased consumer spending. Deposits also grew by 11.9%.
5. Net Interest Margin: The bank’s net interest margin, a crucial indicator of profitability, contracted slightly to 3.43%, compared with 3.55% a year ago and 3.47% in the prior quarter.
6. Asset Quality: SBI’s gross non-performing assets (NPA) ratio was reported at 2.55% as of end-September, demonstrating an improvement from 2.76% at the end of June. The net NPA ratio stood at 0.64% at the end of the quarter, down from 0.71% at the end of the previous quarter.

Indian banks have consistently recorded double-digit loan growth in recent months, primarily due to the increased demand for credit, driven by rising consumer spending. The ongoing festive season is expected to further stimulate consumer spending, thus maintaining the demand for retail loans.

While the financial landscape remains dynamic, SBI’s robust financial performance and improving asset quality indicate its resilience in navigating the challenging economic environment. The bank’s continued focus on prudent lending practices and strengthening its balance sheet positions it well for future growth.

As India’s largest lender, SBI plays a pivotal role in the country’s banking sector, and its performance is closely monitored by the financial community and stakeholders. The positive results for the July-September quarter underscore the bank’s commitment to providing essential financial services to the Indian economy.