SBI pares early gains post Q4 results

The stock surged 5% to Rs 305 after reported 23% year on year jump in standalone net profit at Rs 3,742 crore in March quarter.

Shares of State Bank of India (SBI) stock are trading 2% higher at Rs 296, albeit off their highs, on the NSE on the National Stock Exchange (NSE) after the bank reported a better-than-expected 23% year on year jump in standalone net profit at Rs 3,742 crore for the quarter ended March 2015 (Q4) on account of lower provisioning for bad loans. The state-owned bank had posted a profit of Rs 3,041 crore in the same quarter last fiscal.

The shares had surged as much as 5% to Rs 305 immediately after the result announcement, but subsequently pared their gains.

Net interest income (interest earned minus interest expended) during the quarter grew 14% at Rs 14,712 crore as against Rs 12,903 crore in the corresponding quarter of the previous year.

Analysts on an average had expected profit of Rs 3,349 crore on net interest income of Rs 15,181 crore.

Provisions, other than tax, declined by 21% to Rs 4,635 crore on a y-o-y basis, SBI said in a statement.

The bank’s gross non-performing assets (NPA) as a percentage to total advances declined to 4.25% as on March 31, 2015 (Q4FY15) compared to 4.90% in the December quarter. Gross NPAs stood at 4.95% at the end of March 2014 quarter.

Net NPAs stood at 2.12% in March 2015 quarter against 2.80% in preceding quarter and 2.57% in the same quarter last year.

Meanwhile, the bank’s retail banking operations segment reported a 32.5% decline in profit before tax at Rs 4,208 crore as against Rs 6,234 crore in the previous year's corresponding quarter.

The stock has outperformed the market in the past two weeks, gaining 13% from Rs 262 on May 8, compared to a 3.3% rise in the benchmark CNX Nifty.