 |
|
State Bank of India (SBI), the country's largest lender, reported a strong performance in the second quarter of the current fiscal year (Q2FY25), with its net profit increasing by 27.92% to Rs 18,331 crore compared to the same period last year. The robust growth in profitability was driven by a combination of factors, including strong loan growth, improvement in asset quality, and a rise in net interest income (NII).
SBI's NII, the difference between interest earned on loans and interest paid on deposits, surged by 22.7% year-on-year to Rs 40,038 crore. This growth was fueled by healthy loan disbursements, which increased by 17.7% YoY to Rs 30.97 lakh crore as of September 30, 2023. The bank's total deposits also rose by 11.9% YoY to Rs 47.78 lakh crore.
On the asset quality front, SBI witnessed significant improvement. Gross non-performing assets (NPAs) declined to 2.66% as of September 30, 2023, compared to 3.06% in the same period last year. The bank also made provisions for bad loans, which stood at Rs 8,480 crore in Q2FY25. SBI's operating profit for the quarter rose by 28.5% YoY to Rs 25,022 crore. The bank's board also approved the issue of bonus shares in the ratio of 1:1, meaning shareholders will get one bonus share for every share they hold.
SBI's strong Q2FY25 performance signals a positive outlook for the banking sector. The bank's robust loan growth, improving asset quality, and rising NII are all indicators of its financial strength. The bank's decision to issue bonus shares is also a testament to its confidence in its future prospects. As the Indian economy continues to grow, SBI is well-positioned to benefit from the increased demand for credit.
Source: SBI Q2FY25 results: Net profit increases 27.92% to Rs 18,331 crore