State Bank of India (SBI) reported a 83 per cent jump in standalone net profit at Rs 16,694.51 crore in the fourth quarter of 2022-23 against Rs 9,113.53 crore a year ago, beating analyst estimates.

A Bloomberg poll pegged SBI’s net profit at Rs 14,884 crore.

While the bank’s core net interest income — interest earned minus interest paid — gained 29.47 per cent during the quarter to Rs 40,393 crore against Rs 31,198 crore a year ago, provisions declined to nearly Rs 3,316 crore from Rs 7,237 crore.

The loan loss provisions fell almost 61 per cent to Rs 1,278 crore from Rs 3,262 crore in the corresponding period of the previous year.

The lender’s asset quality also showed an improvement with the percentage of gross non-performing assets (NPAs) declining to 2.78 per cent from 3.14 per cent on a sequential basis. Its gross NPAs in absolute terms fell to Rs 90,928 crore from Rs 98,347 crore during the same period.

SBI said that its gross advances as of March 2023 stood at Rs 32,69,242 crore, a 16 per cent rise over Rs 28,18,671 crore in the year-ago period.

Domestic corporate advances were up 12.52 per cent to Rs 9,79,768 crore against Rs 8,70,712 crore a year ago, while retail loans stood at Rs 11,79,152 crore, a 18 per cent rise over Rs 10,02,303 crore in the previous year.

Home loans showed a rise of 14.07 per cent to Rs 6,40,680 crore from Rs 5,61,651 crore.

Speaking to the press, SBI chairman Dinesh Khara said the bank expects a credit growth of 12-14 per cent for the current fiscal.

On the Reserve Bank of India’s (RBI) expected credit loss (ECL) system for provisioning for loans, Khara said that while SBI will wait for the central bank’s final guidelines on ECL, as of now, "ECL is a fiction’’.

He added that if it is implemented, the bank is well placed to deal with the new mechanism without any adverse impact on its balance sheet.

The RBI has been planning to adopt the expected loss approach for loan provisions by lenders.

Banks now follow the “incurred loss” approach, where money is set aside after an asset becomes stressed. In the new framework they will have to constantly recognise credit losses given the current conditions of a particular asset and forecast information. This will have to be provided at every reporting date.

The better than expected results of SBI failed to lift up the stock as profit booking saw the counter settling lower by 2.11 per cent or Rs 12.35 at Rs 574.15 on the BSE.