SBI posts Q4 net profit of Rs 3,581 crore on one-time gain from SBI Cards

State Bank of India (SBI) on Friday reported standalone net profit of Rs 3,581 crore in the March quarter of FY20 (Q4FY20). The profit grew 326.93 per cent from Rs 838 crore clocked in the year-ago quarter (Q4FY19). Sequentially, the profit declined 35.85 per cent.

The profit was supported by one-time gain of Rs 2,731.34 crore from the stake sale in SBI Cards done during the quarter.

The shares of the bank jumped 9 per cent higher post the results to Rs 189.8 on the BSE. In comparison, the S&P BSE Sensex was at 34,303 level, up 322 points or 0.95 per cent.

On a consolidated basis, the bank’s net profit came in at Rs 6,909.95 crore.

"For the full year FY20, net profit stood at Rs 14,488 crore, as against net profit of Rs 862 crores in FY19. This was the bank's highest-ever yearly profit. Operating Profit, on th other hand, increased to Rs 68,133 crores in FY20 from Rs 55,436 crores in FY19, an increase of 22.90 per cent YoY," the bank said in a statement.

The profit missed Street estimates that expected the bank to report nearly 900 per cent year-on-year (YoY) rise in the profit. Kajal Gandhi, research analyst at ICICI Direct, pegged the bank’s net profit at Rs 8,245 crore during the period under review, up 884 per cent YoY.

On the other hand, the bank’s pre-tax profit came in at Rs 4,970.04 crore, up 1052.6 per cent from Rs 431.20 crore reported in Q4FY19. The amount dipped 54.69 per cent sequentially from Rs 10,969.04 crore reported in Q3FY20.

For the quarter under review, the bank made provisions worth Rs 13,495.08 crore, of which provisions for non-performing assets stood at Rs 11,893.73 crore.

“The bank has made provisions aggregating Rs 938 crore against the accounts with the outstanding amount of Rs 6,250 crore, which are standard, but would have slipped to NPA/sub-category on March 31, 2020 had the RBI debt servicing relief as above not been reckoned,” the management said in a statement in respect of Covid-19 provisions.

Besides, it added that total provisions for IBC-related accounts stand at Rs 5,767 crore.

"Moratorium has been availed by 21.8 per cent of customers," said Rajnish Kumar, chairman, SBI.

The state-owned bank’s provisions swell 86.06 per cent sequentially from Rs 7,252.9 crore set aside in Q3FY20. On a yearly basis, the provisions slipped 18.21 per cent from Rs 16,501 crore in Q4FY19. 

Analysts expected the bank to set aside provisions anywhere between Rs 9,278.8 crore and Rs 12,326.1 crore. “We peg slippages at Rs 8,000 crore, while non-performing assets (NPA) provisions are seen moderating to Rs 9,900 crore. Investment provisions write-back can lead to further decrease in overall provisions. The amount would not be comparable sequentially as Essar provision write-back was huge at Rs 4,990 crore,” Kajal Gandhi of ICICI Direct wrote in an earnings preview note.

The bank reported corporate slippages at Rs 1,561 crore, compared to Rs 9,467 crore reported in Q3FY20. Agri-slippages, meanwhile, came in at Rs 5,238 crore, as against slippages worth Rs 2,965 crore reported in the previous fiscal of the current quarter. 

The overall asset quality improved during the quarter under review. The bank’s gross non-performing assets (GNPA) came in at Rs 1.49 lakh crore crore, down from Rs 1.59 lakh crore in Q3FY20. A year-ago, the GNPAs were at Rs 1.72 lakh crore.

Net NPA (NNPA), meanwhile, came in at Rs 51,871.30 crore, down from Rs 58,249 crore in Q3FY20. The same was Rs 65,895 crore in Q4FY19.

In percentage terms, the GNPA ratio came in at 6.15 per cent, while the NNPA ratio came in at 2.23 per cent

Net interest income (NII) – a bank’s major source of income based on the difference between interest received on loans extends and interest paid on deposits -- came in at Rs 22,766 crore, down 0.81 per cent from Rs 22,954 crore reported in the corresponding quarter of the previous fiscal.  On a quarterly basis, the NII declined 18 per cent from Rs 27,778.8 crore earned in Q3FY20.

"Net Interest Income of the Bank grew by 11.02% YoY during FY20. Domestic Net Interest Margin (NIM) improved to 3.19 per cent in FY20, registering an increase of 24 bps YoY. Moreover, non-interest income for FY20 at Rs 45,221 crore is up by 22.97 per cent YoY," the bank said.

As regards the loan book, the bank's total gross advances were Rs 24.22 lakh crore at the end of the March, 2020 quarter, up 5.26 per cent QoQ from Rs 23.01 lakh crore in Q3FY20. On a YoY basis, the advances grew 5.64 per cent from Rs 22.93 lakh crore reported in Q4FY19.

Of the total advances, corporate loans were Rs 8.44 lakh crore, up 9.5 per cent QoQ, from Rs 7.71 lakh crore in Q3FY20.