SBI Q2 profit falls 40% YoY to Rs 9.44 billion as NPA declines

State Bank of India on Monday reported a 40 per cent YoY decline in its net profit at Rs 9.44 billion for September quarter of FY19 against Rs 15.81 billion reported in the year-ago quarter. 

It attributed the profit to domestic credit growth, decline in slippage ratio, credit cost declining by 68 bps YoY and overhead expenses falling by 3.19 per cent YoY.

The lender, in a press realease, said it was on track to meet slippage ratio and credit cost guidance for FY19E & FY20E. 

Slippages during the period came in at Rs 109 billion against Rs 143 billion in the previous quarter. The bank's gross slippage during the period was lowest in four quarters while slippage ratio, which stood at 2 per cent, is lowest in six quarters, said Rajnish Kumar, Chairman of State Bank of India, in a presser following the results announcement. 

Net NPA (non-performing assets) during the quarter stood at 4.84 per cent against 5.29 per cent QoQ while gross NPA during the period came in 9.95 per cent against 10.69 per cent in the previous quarter. 

"Net interest income (NII) increased by 12.48 per cent from Rs 185.86 billion in Q2FY18 to Rs 209.06 billion in Q2FY19. Non-interest income decreased by 41.46 per cent from Rs 160.17 billion in Q2FY18 to Rs 93.75 billion in the said quarter, mainly on account of YoY decline of 72.69 per cent in trading income. Q2FY18 also included Rs 54.36 billion on account of part stake sale in SBI Life," it said in its press release. 

Operating profit in the second quarter declined by 30.47 per cent from Rs 199.99 billion in Q2FY18 to Rs 139.05 billion in Q2FY19, mainly due to lower trading income in Q2FY19 and one-time income.

Net segment revenue for the quarter stood at Rs 666.08 billion against Rs 654.3 billion in the September quarter of last fiscal.  The bank also made a one-time gain of Rs 15.60 billion. 

The domestic credit for the period grew 11.1 per cent YoY.

The bank has made Rs 660 million provisions related to IL&FS issue, the management said.

Shares of the bank gained nearly three and a half per cent to settle at Rs 295.