SBI Q2 Profit Soars 28% to ₹18331 Crore, But Shares Drop 3%

State Bank of India (SBI) reported a 28% YoY increase in Q2 profit, reaching ₹18,331 crore, surpassing analyst expectations. The bank’s net interest income (NII) grew by 5.3%, while asset quality improved with a reduction in non-performing assets. Despite strong financial performance, SBI’s stock fell by 3% following the announcement.

CONTENTS:

• SBI’s Q2 shows strong profit growth.
• SBI reports profit, asset quality gains.
• SBI exceeds profit forecast, shares dip.
• SBI Q2 profit rises 28%.

SBI Q2 Profit Soars 28% to ₹18331 Crore, But Shares Drop 3%

SBI’s Q2 shows strong profit growth

SBI Q2 Profit Soars 28% to ₹18331 Crore

SBI Q2 Earnings Highlights: Key Updates and Projections

State Bank of India (SBI), India’s largest lender, has announced its Q2 results for the September quarter, showing a 28% year-on-year rise in net profit and a 5.4% increase in Net Interest Income (NII). Sequential improvements were observed in asset quality, with Gross Non-Performing Assets (GNPA) decreasing to 2.13% from June’s 2.21% and Net NPA dropping to 0.5%, outperforming Motilal Oswal’s projections of 2.16% and 0.55%, respectively.

Growth Guidance:
SBI management reaffirmed a 14-16% credit growth target for FY25 and an adjusted deposit growth projection of 10-11% for the current year, slightly down from the earlier 12-13% guidance. SBI’s Chairman, CS Setty, shared the bank’s strategic steps to enhance its deposit base, leveraging its branch network and technological reach to improve customer service. Deposits for the quarter crossed the ₹51 trillion mark, with SBI aiming to open around 65,000 new accounts daily.

Net Interest Margin (NIM):
The overall NIM was reported at 3.14%, with a domestic NIM of 3.27%. Credit costs stood at 0.38% for the quarter, indicating stable margins.

Asset Quality & Slippages:
SBI recorded a decline in gross slippages to ₹4,951 crore, down from ₹8,707 crore in the previous quarter, though recovery and upgrades also decreased from June’s figures. Chairman Setty emphasized the robustness of SBI’s portfolio and expressed confidence in maintaining asset quality and growth with adequate capitalization.

Digital Transformation Roadmap:
In August, SBI rolled out a five-year digital transformation plan to strengthen its tech resilience, optimize data infrastructure, and enhance cybersecurity. This roadmap aligns with SBI’s commitment to staying at the forefront of digital innovation.

Analyst Ratings and Stock Reactions:
Ahead of the Q2 earnings announcement, SBI’s stock gained 10% over the last month in anticipation of solid performance. Analysts generally remain optimistic, with 39 out of 49 recommending a “buy” on SBI shares, and several expecting price targets near or above ₹1,000.

SBI reports profit, asset quality gains

SBI Q2 Profit Soars 28% to ₹18331 Crore

SBI Q2 Results Overview: Key Metrics and Strategic Initiatives

State Bank of India (SBI) announced a 28% increase in net profit to ₹18,331 crore for Q2, ending September 30, 2024, compared to ₹14,330 crore in the same period last year. Interest income rose by 12.32% to ₹1.14 lakh crore, with net interest income (NII) growing 5.37% year-over-year to ₹41,620 crore.

The bank’s net interest margin (NIM) dropped by 15 basis points (bps) annually and 8 bps sequentially, reaching 3.14% for Q2. Domestic NIM also declined, standing at 3.27% compared to 3.35% in the previous quarter.

SBI’s board has approved raising up to ₹20,000 crore in long-term bonds through either a public issue or private placement within FY25.

Asset Quality Improvement

SBI reported a 4.14% year-over-year reduction in gross non-performing assets (GNPA), which totaled ₹83,369 crore, while net NPAs declined by 4.96% to ₹20,294 crore. GNPA ratio improved to 2.13% from 2.21% in the previous quarter and 2.55% in Q2FY24, with net NPA falling to 0.53%.

Provision coverage increased to 75.66%, up by 21 bps year-over-year. The slippage ratio for the first half of FY25 was 0.68%, and for Q2FY25 it was 0.51%, reflecting a slight annual increase of 5 bps.

Deposits and Advances Growth

SBI’s total deposits grew by 9.13% annually, reaching ₹51.17 lakh crore. Current account deposits rose by 10.05% year-over-year to ₹2.78 lakh crore, while term deposits increased by 12.51% to ₹29.45 lakh crore. Foreign office deposits totaled ₹2.07 lakh crore. SBI’s domestic credit-to-deposit (CD) ratio was 67.8%, and the bank intends to expand its CASA (Current Account Savings Account) share.

The lender’s gross advances increased by 14.93% to ₹39.21 lakh crore. Its domestic corporate loan book rose to ₹11.57 lakh crore, and SME credit saw a 17.36% rise to ₹4.57 lakh crore.

Stake Adjustments in Subsidiaries

SBI slightly reduced its stakes in several companies. Its shareholding in SBI Cards and Payment Services dropped to 68.61% and in SBI Life Insurance to 55.39%. Additionally, its stake in Yes Bank decreased to 23.98% following the exercise of share warrants and employee stock options. On August 9, SBI also divested a 2% stake in The Clearing Corporation of India Limited.

SBI shares traded 1% lower at ₹851.15 at 1:40 pm on November 8.

SBI exceeds profit forecast, shares dip

SBI Q2 Profit Soars 28% to ₹18331 Crore

SBI Q2 Results: PSU Bank’s Profit Surges 28% to ₹18,331 Crore, Outperforming Expectations

India’s largest public sector lender, State Bank of India (SBI), reported a 27.9% increase in net profit for Q2 FY25, reaching ₹18,331 crore for the July-September period, surpassing analyst projections. The bank’s net profit outperformed market expectations set by Zee Business, which had forecast ₹16,400 crore in profit on a net interest income (NII) of ₹41,600 crore.

SBI’s NII, representing the difference between interest earned and interest paid, rose by 5.4% to ₹41,620 crore. The net interest margin (NIM), a crucial indicator of financial institution profitability, was reported at 3.27% for the quarter, compared to 3.35% in the previous quarter and 3.43% in the year-ago period.

During the quarter, SBI recorded a 14.9% growth in overall credit, with a 15.5% rise in domestic advances.

Asset Quality and Non-Performing Assets

SBI also reported an improvement in asset quality. Its gross non-performing assets (GNPAs) reduced to 2.13% of total loans, down from 2.21% in the previous quarter. Net NPAs also declined, reaching 0.53% from 0.57% in the prior quarter.

Stock Performance

Following the earnings announcement, SBI’s stock fell, reaching as low as ₹834.3 on the BSE, a decline of up to 2.9%. As of 2:30 pm, shares were trading 2.4% lower at ₹838.7 apiece.

SBI Q2 profit rises 28%

SBI Q2 Profit Soars 28% to ₹18331 Crore

SBI Q2 Results: Profit Rises 28% YoY to ₹18,331 Crore; Shares Drop by 3%

India’s leading public sector bank, State Bank of India (SBI), reported a 28% year-on-year (YoY) increase in standalone net profit to ₹18,331.4 crore for the July-September period (Q2 FY25). This performance exceeded Street expectations, which had anticipated a 10-17% YoY rise in profit.

In comparison, SBI posted a profit of ₹14,331 crore in Q2 FY24. On a sequential basis, Q2 profit grew by 7.6% from ₹17,035.16 crore in Q1 FY25. Despite the strong performance, SBI shares declined by 2.9% on the BSE to ₹834.3.

Operational Metrics

SBI’s net interest income (NII) rose by 5.3% YoY to ₹41,620 crore, up from ₹39,500 crore in Q2 FY24. Quarter-on-quarter (QoQ), NII remained almost unchanged from ₹41,125.5 crore in Q1 FY25. However, the bank’s net interest margin (NIM) fell by 16 basis points (bps) YoY and 8 bps QoQ to 3.27% in Q2 FY25, down from 3.43% in Q2 FY24 and 3.35% in Q1 FY25.

Loans and Deposits

SBI’s loan book grew 14.9% YoY and 2.85% QoQ to ₹39.2 trillion. Within this, domestic corporate loans expanded by 18.35% YoY to ₹11,57,171 crore, while domestic retail personal loans rose 12.32% YoY to ₹13,96,624 crore. Deposits rose 9.13% YoY and 4.4% QoQ to ₹51.17 trillion, with the CASA ratio at 40.03%, reflecting a 185 bps YoY decline.

Asset Quality

Gross non-performing assets (GNPAs) reduced by 4.14% YoY to ₹83,369 crore, while net NPAs (NNPAs) dropped by about 5% YoY to ₹20,294 crore. As a percentage, the GNPA ratio improved by 8 bps QoQ to 2.13%, while the NNPA ratio decreased by 4 bps to 0.53%.

Provisions and Profitability Ratios

SBI’s total provisions for Q2 FY25 were ₹4,505.7 crore, a rise from ₹115.28 crore YoY but a decrease from ₹4,518 crore in Q1 FY25. Its return on assets (RoA) and return on equity (RoE) for H1 FY25 were 1.13% and 21.78%, respectively.