Bombay:
State Bank of India (SBI), the country’s largest lender, expects credit growth to remain in double digits as it ramps up its efforts to attract more deposits, where it sees growth in line with the industry.
The bank reported a 74% increase in quarter-on-quarter net profit on Saturday, driven by higher credit growth and an improvement in asset quality. Net profit rose to a record 132.64 billion Indian rupees ($1.62 billion) in June-September, beating analysts’ forecast of 105.30 billion rupees, according to data from Refinitiv IBES. Net interest income, the difference between interest earned and interest paid, increased by 13% to rupees 351.82 billion.
Advances increased by 18.15%, while deposits increased by 9.99%. “We should have credit growth of 14-16% in the current fiscal year,” Chairman Dinesh Kumar Khara said in a news conference.
“Now we also have treasury investments, which we expect to decline. Therefore, we are confident in supporting credit growth,” he said, adding that there was an improvement in occupancy and business had returned to normal. pre-pandemic levels.
The bank has a pipeline of rupees 2.4 trillion term loans as demand comes in from sectors such as infrastructure, renewables and services.
And while the bank did not provide a deposit growth target, Dinesh Kumar Khara said SBI would not lag behind the sector. Indian banks saw a 17.95% year-over-year jump in credit growth for the fortnight to Oct. 7, central bank data showed, with market participants expecting growth to accelerate in the coming months.
Deposit growth was 9.63% in this period. SBI’s core net interest margin (NIM), a key indicator of profitability, improved to 3.55% from 3.50% a year earlier. It expects to keep domestic NIMs at current levels.
The quality of the lender’s assets also improved, with gross non-performing assets (NPA) falling to 3.52% from 3.91% in the previous three months. The net NPA also improved and decreased by 20 basis points.
Total provisions fell from rupees 43.92 billion in the previous quarter to rupees 30.39 billion in June-September. The bank’s solvency ratio was 13.51%, up from 13.35% a year earlier.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)
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