SBI net soars over 25% to Rs 3879 cr as NPAs dip,advances rise

Beating expectations, country's largest lender State Bank of India today reported 25.12 per cent jump in net profit at Rs 3,879 crore for the September quarter, driven by drop in bad loans, higher non-interest income and robust loan growth.
The non-interest income jumped 35.58 per cent to Rs 6,197 crore from Rs 4,571 crore, primarily boosted by a hefty Rs 485 crore repatriation of profits from its foreign operations, which on an average contributes to a fourth of the bank's business.
Similarly, its treasury income jumped multiple times to Rs 1,493 crore from a little over Rs 490 crore a year ago.

Chairperson Arundhati Bhattacharya said excluding this one-time gain by way of repatriation of profits from foreign branches, which she described as the first in the bank's history, net profit growth would have still been a healthy 15 per cent.
"The Rs 485 crore has definitely helped us in reporting higher profit. Even if you take that out, we have a 15 per cent rise.
"This growth is because of increase in loan book and our higher income from treasury operations which has gone up," Bhattacharya said and described the numbers as beating the market view on many counts.

Domestic net interest margins stood at 3.32 per cent as against 3.49 per cent, while whole bank NIM stood at 3.01 per cent, up 2 basis points year-on-year.

Asset quality of the bank improved to 4.15 per cent from 4.89 per cent or at Rs 58,834 crore, while the net NPA stood at 2.14 per cent from 2.73 per cent or at Rs 28,592 crore.
"Overall, we are beginning to see the end of this entire cycle of NPAs. I am much more confident about the quality of asset going forward," the chairperson said.
She said there are one or two large accounts, which the bank is trying to work out.
"If they happen, they will happen, if they don't we may have to take those hits. But, I would like to assure you that even in those accounts the assets are very good and even if there is a hit, it will be a temporary one," she said.

Commenting on the numbers, Ravi Shenoy of Motilal Oswal Securities described the numbers as above their expectations and noted that the bank's provisioning coverage ratio has moved above 70 per cent for the first time.
Giving a thumbs up to the bank, he said the brokerage has a "Buy" call on SBI.
"The over 25 per cent net growth is a positive surprise as we expected only a net profit of Rs 3,290 crore that was driven partly by a Rs 490 crore forex gains. Loan growth at 4 per cent was subdued, but gross NPA rise was constrained at one per cent," Shenoy said.