State Bank of India (SBI) topped Street estimates even though it posted nearly a 7 per cent drop in standalone net profit for the December quarter of 2020 on higher provisions.

The country’s largest lender reported a net profit of Rs 5,196 crore compared with Rs 5,583 crore in the same period of the previous year. Analysts were expecting the lender to report profits of Rs 4,500-5,000 crore for the period.

While net profit wasahead of expectations, SBI chairman Dinesh Khara exuded confidence when he said that the disruption seen on account of Covid-19 was waning and that there was positivity in the industry and economy.

Khara estimates the SBI will see a double digit credit growth from the second quarter of the next fiscal, though this year it is likely to end with a rise of 7 per cent.

During the quarter, there was good news on the asset quality front when the bank saw non-performing assets (NPAs) in absolute terms falling to Rs 1,17,244 crore from Rs 1,25,863 crore in the preceding three months.

The gross NPA ratio also declined to 4.77 per cent from 5.28 per cent in the preceding quarter, SBI had a provision coverage ratio of 90 per cent. If the bank had classified the loans in accordance with RBI norms, its NPAs in absolute terms will stand at Rs 1,33,705 crore, while the gross NPA ratio will come at 5.44 per cent.

Khara disclosed that the SBI has received requests for restructuring loans worth Rs 18,125 crore, of which Rs 4,506 crore has already been implemented. Of the total amount, close to Rs 3,900 crore are in the retail category, Rs 2,500 crore from its SME customers and Rs 11,000 crore from corporate houses. Total slippages and restructuring up to the third quarter stood at Rs 412,16 crore and SBI expects this number to be around Rs 60,000 crore by the end of this fiscal.

SBI disclosed that during the period, credit growth stood at 6.73 per cent over the previous year, mainly driven by retail (personal) advances which was back to pre-Covid levels and showed a growth of 15.47 per cent as compared to the preceding year), SME at 5.62 per cent and corporate advances which rose 2.23 per cent. However, if one were to include corporate bonds and commercial paper, the loan book has grown by 8.16 per cent.