Net profit at State Bank of India (SBI) surged by 62 per cent for the third quarter ended December 31, 2021, beating analyst estimates. The country’s largest lender posted a standalone net profit of Rs 8,431.88 crore compared with Rs 5,196.22 crore in the corresponding period of the previous year.

Analysts were expecting the bank to post a net profit of around Rs 6,000 crore. The jump in its bottomline came as provisions fell to Rs 6,973.97 crore from Rs 10,342.39 crore in the year-ago period. Of this amount, the provisions against bad loans rose to Rs 3,096.09 crore against Rs 2,290.38 crore in the year ago period.

Asset quality of the SBI improved during the period with the percentage of gross non-performing assets (NPAs) falling to 4.50 per cent from 4.90 per cent on a sequential basis and from 4.77 per cent in the corresponding period of the previous year. In absolute terms, the gross NPAs stood at Rs 1,20,028.77 crore from Rs 1,23,941.77 crore in the July-September period. Slippages declined over the preceding three months to Rs 2,334 crore from Rs 4,176 crore.

SBI disclosed that it has restructured loans worth Rs 32,895 crore in the Reserve Bank of India’s two loan recast schemes.

Speaking to reporters on Saturday, chairman Dinesh Khara disclosed that during the period, the bank has made additional provision of Rs 1,700 crore as a prudent measure. Though he did not disclose the identity of the account, it could include Future Retail Ltd (FRL), which could not repay Rs 3,500 to lenders by January 29. Khara added that the bank has made adequate provisions (overall) and insulated its balancesheet from any future shocks.

During the period, though SBI’s net profit swelled by 62 per cent, its net interest income (NII-interest earned minus interest paid) rose only by 6.48 per cent to Rs 30,687 crore from Rs 28,820 crore in the same period of the previous year.

BoB net doubles

Bank of Baroda on Saturday reported doubling of its net profit to Rs 2,197 crore on a standalone basis in the quarter ended in December 2021.

The lender had posted a net profit of Rs 1,061 crore in the same quarter a year ago.

Total income during the third quarter of 2021-22 rose to Rs 20,482.26 crore against Rs 20,407.45 crore in Q3FY21, Bank of Baroda said.

Interest income rose to Rs 17,963 crore in the quarter under review from Rs 17,496.71 crore in the year-ago quarter.

Here, the SBI chief said that the modest growth was on account of high liquidity in the system. He however, added that it should improve once the interest rates start rising. The quarter also saw total advances rising to Rs 26,64,602 crore from Rs 24,56,607 crore in the same period of the previous year. of this, the domestic retail advances increased to Rs 9,52,189 crore (Rs 8,31,134 crore) while corporate loans were at Rs 7,83,379 crore from Rs 7,88,208 crore in the year ago period.

Replying to a query, Khara said that the bank could see a loan growth of around 9 per cent at the end of this fiscal as against its earlier expectation of 8.5 per cent. he added that loans worth Rs 4 lakh crore (both working capital and project) are awaiting utilisation by its customers.