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State Bank of India (SBI) has moved higher by 7% to Rs 338, bouncing back 8.5% from intra-day low on the BSE, after the bank’s assets quality in September quarter (Q2FY18) improves on sequential basis. The stock hit a low of Rs 310 in intra-day trade. "SBI reported sequential fall in fresh slippages to Rs 10,630 crore in Q2FY18 from Rs 30,060 crore in Q1FY18. Sharp fall in fresh slippages has positively surprised us, as we were projecting slippages of nearly Rs 15,500 crore for Q2FY18. Further, the new management chose to strengthen the balance sheet over profitability by increasing provision coverage ratio (PCR) to 47.4% (sans technically w/o loans) and 65.1% (with technically w/o loans) in Q2FY18 compared to 42.7%/60.8% in Q1FY18," said Asutosh Kumar Mishra, Senior Research Analyst, Banking & Financials at Reliance Securities. "On core operating front, the bank delivered a healthy operating performance as its operating profit surged by 22.7% QoQ to Rs 14,560 crore led by strong growth in NII (5.6% QoQ to Rs 18590 crore) and other income from normal operations (+32.1% QoQ).
Further, the bank booked one-time gain of Rs 5440 crore form the stake in its life insurance subsidiary SBI Life," he added.The bank’s gross non-performing assets (NPAs) during the quarter under review declined to 9.83%, as against 9.97% in Q1FY18. Net NPAs, too, fell to 5.43% of the net advances at the end of second quarter this fiscal, from 5.97% in the previous quarter. Slippage ratio declined to 1.85% in Q2FY18 from 5.38% in Q1FY18, significantly improved across all segments. The bank said the special recovery teams formed at all critical processing centres and requisitioned services of retired bank officials to boost recoveries. Net interest income (interest income minus interest expenses) grew 5.6% at Rs 18,586 crore in Q2FY18 against Rs 17,606 crore in previous quarter. The bank reported net profit of Rs 1,582 crore against Rs 2,006 crore in Q1FY18. The trading volume in the counter more than doubled, with a combined 51.46 million shares changing hands on the BSE and NSE till 01:42 PM.