State Bank of India (SBI) has achieved an extraordinary feat by reporting its highest-ever quarterly profit at ₹16,884 crore in the first quarter of 2023-24. This remarkable figure represents a nearly three-fold increase compared to ₹6,068 crore in the same period last year. The bank’s prudent measures and strategic approach have propelled this outstanding growth.
On a consolidated basis, SBI’s net income surged over two-fold to ₹18,537 crore in Q1 2023-24 from ₹7,325 crore in the corresponding quarter of the previous year. The total income also witnessed a significant rise, reaching ₹1,32,333 crore during the period compared to ₹94,524 crore in Q1 2022-23.
Despite these remarkable achievements, some sequential numbers showed marginal deterioration, including margins and net interest income, which led to a slight decline in SBI’s shares on the stock market. Chairman Dinesh Khare expressed his frustration with the market’s focus on sequential numbers and advocated for annualized comparisons instead.
Khare emphasized that SBI’s prudent fiscal planning, particularly in the first quarter, should be viewed through an annual lens rather than a sequential one. The bank experienced unique factors in the preceding quarter, which impacted the current quarterly figures. Despite this, SBI’s net income growth on a sequential basis was still at a healthy 1.14 percent.
The bank’s asset quality showed significant improvement, with the slippage ratio seeing a notable reduction. The gross non-performing assets (NPAs) fell to 2.76 percent, a substantial decrease from 3.91 percent in the previous year. This improvement was primarily attributed to lower slippages from the agri, SME, and retail sectors.
SBI’s credit cost also decreased, resulting in lower loan loss provisions compared to the previous year. The provision coverage ratio showed improvement, standing at 91.41 percent. Additionally, the bank’s domestic net interest margin (NIM) rose to 3.47 percent, and the chairman expects it to be maintained at the same level or marginally higher in the future.
The bank’s credit growth, though impacted by lower growth in foreign advances, remained steady at 13.90 percent. Domestic advances, particularly in SME and retail sectors, contributed to robust growth, with auto loans crossing the ₹1 lakh crore mark during the quarter.
SBI’s focus on digital banking continued to yield positive results, with a significant percentage of savings accounts and retail asset accounts acquired through digital channels such as Yono.
SBI’s historic quarterly profit and robust financial performance reflect the bank’s strategic planning, asset quality management, and focus on digital banking initiatives. Despite some sequential challenges, SBI remains steadfast in its commitment to maintain a strong financial position and drive economic growth in the country.
