State Bank of India Q1 profit zooms 81% on stake sale in SBI Life Insurance; stock price jumps over 3%

SBI share price surged over 3 per cent after the bank reported an 81 per cent rise in its net profit

State Bank of India (SBI) reported a whooping 81 per cent on-year rise in standalone net profits at Rs 4,189 crore for the April-June quarter. The Bank had reported a profit of Rs 2,312 crore in the corresponding quarter of the previous fiscal. The profit was supported by the one-time gain from the stake sale of a certain portion in life insurance business. For the quarter under review, SBI made provisions of Rs 12,501.30 crore, against Rs 13,495.08 crore in the quarter ended on March 31, 2020. It was, however, higher than Rs 9,182.94 crore provisions made in the corresponding quarter of the preceding fiscal. “Exceptional items for quarter ended June 30, 2020, represent a profit of Rs 1,539.73 crore on sale of a certain portion of investment in bank’s subsidiary SBI Life lnsurance Company Limited,” said the bank in a statement.

The net interest income (the difference between interest earned and interest paid to depositors) of SBI grew by 16.14 per cent on-year to Rs 26,642 crore in the first quarter from Rs 22,939 in the April-June quarter of last year. The same was at Rs 22,767 in the quarter ended March 31, 2020. The net interest margin (NIM) came in at 3.24 per cent in the quarter under review, against 2.94 per cent in the previous quarter, and 3.01 per cent in the same quarter last year. Home loan, which constitutes 22 per cent of Bank’s domestic advances, has grown by 10.72 per cent on-year.

Net NPA were at Rs 42,703 crore, down from Rs 51,871.3 crore in the quarter ended on March 31. The net NPA ratio came in at 1.86 per cent which is down 121 basis points (bps) on-year and 37 bps sequentially. However, the asset quality of the bank improved sequentially with gross non-performing assets (GNPA) at Rs 1.29 lakh crore, down from Rs 1.49 lakh crore reported in the previous quarter. While, in the percentage terms, GNPA ratio improved by 71 bps on a sequential basis to 5.44 per cent from 6.15 per cent in the January-March quarter of preceding fiscal.

During the quarter, the bank reported slippages at Rs 3,637 crore, down from Rs 8,101 crore reported in Q4FY20. While the same was at Rs 16,212 crore in the corresponding quarter of the fiscal.

State Bank of India share price surged over 3 per cent to hit day’s high of Rs 194.40 apiece on BSE. In comparison, S&P BSE Sensex was down 0.30 per cent at 37,623.