scorecardresearchSBI Q3 net soars 62%; discloses ₹27,000 crore exposure to Adani Group

SBI Q3 net soars 62%; discloses 27,000 crore exposure to Adani Group

Updated: 04 Feb 2023, 09:52 AM IST
TL;DR.
On a standalone basis, State Bank of India's post-tax profit grew to 14,205 crore during the October-December 2022 period from 8,432 crore in the year-ago period and 13,265 crore in the preceding July-September quarter.
A State Bank of India Ltd. (SBI) branch in Mumbai, India, on Thursday, Feb. 2, 2023. SBI has given loans of as much as $2.6 billion to companies in the Adani conglomerate, or about half of what is allowed under the rules, according to a person familiar with the matter. Photographer: Dhiraj Singh/Bloomberg

A State Bank of India Ltd. (SBI) branch in Mumbai, India, on Thursday, Feb. 2, 2023. SBI has given loans of as much as $2.6 billion to companies in the Adani conglomerate, or about half of what is allowed under the rules, according to a person familiar with the matter. Photographer: Dhiraj Singh/Bloomberg

(PTI) The country's largest lender SBI on Friday reported a 62 per cent rise in its net profit to 15,477 crore for the December 2022 quarter, helped by core income growth and improvement in asset quality.

On a standalone basis, State Bank of India's post-tax profit grew to 14,205 crore during the October-December 2022 period from 8,432 crore in the year-ago period and 13,265 crore in the preceding July-September quarter.

Amid the controversy triggered by a slew of allegations against the Adani Group, the government-owned lender disclosed that its overall exposure to the Gauram Adani-led embattled conglomerate is 27,000 crore and it does not see any difficulties in loan repayments.

For the quarter under review, the core net interest income rose 24.05 per cent to 38,069 crore on the back of a 0.35 per cent expansion in the net interest margin to 3.50 per cent and 18.61 per cent growth in net advances.

Amid the 'war for deposits' in the system, the bank posted a slower deposit growth at over 8 per cent, and chairman Dinesh Khara said it has already activated multiple measures to push up the number.

He also added that it carries excess government securities holdings of over 3 lakh crore, which can be deployed, and made it clear that it will not engage in a price war in such a way that it has to compromise on the NIMs.

The other income rose to 11,468 crore for the reporting quarter against 8,673 crore in the year-ago period.

On the asset quality front, it reported a gross non-performing assets ratio of 3.14 per cent as against 4.50 per cent in the year-ago period and 3.52 per cent in the quarter-ago period. The fresh slippages came at 3,098 crore against 2,334 crore in the December 2022 quarter.

With the reduction in the stock of NPAs – the overall dud assets came under 1 lakh crore for the first time since 2016 – the amount of money set aside as provisions also reduced, with the provisions for non-performing assets nearly halving to 1,586 crore for the reporting quarter.

Khara said the bank will strive to maintain the credit costs at the same level going forward as well.

There is a case for being bullish on the overall economy, Khara said expecting capital expenditure-related credit demand to come from infrastructure, roads, ports, iron and steel, white goods, tourism and hotels, aviation, commercial real estate, data centres, electric vehicle and renewables and batteries sectors.

The bank's overall capital adequacy stood at 13.27 per cent as of December 31, with a core capital buffer at 9.27 per cent. Khara said if one adds the profits ploughed back, the capital levels become more comfortable, and it would go for a fundraise only if required.

The SBI scrip gained 3.12 per cent to close at 544.45 apiece on the BSE, as against a 1.52 per cent jump on the benchmark.

First Published: 04 Feb 2023, 09:52 AM IST