SBI returns to profitability with standalone net profit of Rs 945 crore in Q2; here are key reasons

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Net NPAs or bad loans stood at 4.84% of the net advances, down from 5.43% from the same period a year ago. (Image: Reuters)

The State Bank of India (SBI) has reported a standalone net profit of Rs 945 crore for the April-September period, on the back of one-time gain and lower provision for bad loans. However, the profit is 40% lower when compared with the profit of Rs 1,581.55 crore in the corresponding period a year ago. This could have been a fourth straight quarterly loss for the bank if not for the one-time gain of Rs 1,087.4 crore from the sale of investments in its general insurance and merchant banking business.

During the three months period ended on September 30, the state-run bank’s total income rose to Rs 66,607.98 crore as against Rs 65,429.63 crore in the year-ago period. The net income or the core income of the lender increased 12% to Rs 20,905 crore during the quarter from the same quarter last year.

On a consolidated basis, SBI posted a net profit of Rs 576.46 crore as compared with Rs 1,840.43 crore in the July-September quarter of previous fiscal, a decline of 69%. On the other hand, the consolidated total income of Rs 79,302 crore from Rs 74,948 crore in the same period in the previous financial year. The state-run lender had reported a net loss of Rs 4,230.44 in the first quarter of this financial year, due to higher provisioning for bad loans.

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The asset quality of the bank witnessed an improvement as the percentage of gross NPAs during the September quarter was reported at 9.95%, as against 10.69% in the previous quarter, and 9.83% in the corresponding quarter in 2017. On the other side, net NPAs or bad loans stood at 4.84% of the net advances, down from 5.43% from the same period a year ago.

For the quarter, provisions for bad loans for the bank declined to Rs 10,381 crore from Rs 16,842 crore in the corresponding period last financial year.

On Monday, shares of SBI closed 3.45% higher at Rs 295.30 on BSE from their previous close. The shares of the lender touched an intraday high of Rs 299.90 and an intraday low of Rs 283.75 a piece.

Meanwhile, both Sensex and Nifty, the benchmark indices of the domestic equity markets, ended the day in red amid weak cues from global markets and weak rupee. While Sensex slipped below the 35,000-level to touch a low of 34,811.60 due to heavy selling pressure, Nifty also hit a low of 10,477 to close at 10,524.

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