SBI Q1 net profit up 81% at Rs4,189 cr on one-time gain
03 Aug 2020
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State Bank of India (SBI) has reported an 81 per cent year-on-year (YoY) surge in net profit at Rs4,189.34 crore for the fiscal first quarter ended 30 June 2020 thanks to a one-off gain of Rs1,539.73 crore from sale of stake in its insurance arm SBI Life.
SBI, the country’s top lender, had reported a net profit of Rs2,312.20 crore in the April-June quarter of fiscal year 2019-20.
SBI sold 2.1 per cent equity stake in SBI Life Insurance Company via offer for sale route in June this year to comply with shareholding norms. SBI is now left with 55.5 per cent stake in the life insurance firm against 57.60 per cent earlier.
SBI’ net interest income (NII) for the quarter increased to Rs26,641 crore from Rs22,938 crore in the corresponding quarter last fiscal.
Provisions for the quarter were higher at Rs12,501.30 crore compared to Rs9,182.94 crore in the same quarter last year but lower compared with Rs13,495.08 crore in the previous quarter ended 31 March 2020.
SBI said it had to make additional provision of Rs1,836 crore for Covid-related accounts. Total provisions related to Covid 19 stood at Rs3,008 crore, as of 30 June .
SBI said its provision coverage ratio (PCR) stood at 86.32 per cent as of 30 June 2020. The provisions and contingencies at Rs12,501.3 crore increased by 36.1 per cent year-on-year, including additional provision of Rs1,836 crore on account of Covid-19 related accounts, adhoc provision of Rs1,614 crore with respect to wage revision and Rs5,230.4 crore towards fraud accounts. However, provisions on sequential basis fell 7.4 per cent.
SBI said its provisions only for non-performing assets at Rs9,420.46 crore declined sequentially (down 20.8 per cent) as well as year-on-year (down 19.1 percent) for the quarter ended June 2020.
"The provision of Rs3,008 crore is held by bank on Covid-19 related accounts as of June 2020," it added.
During June quarter, the bank has provided for entire balance amount of Rs5,230.37 crore towards fraud accounts as against the quarterly requirement of Rs1,743.46 crore.
SBI said its asset quality improved significantly in the quarter ended June 2020 as gross non-performing assets as a percentage of total advances declined to 5.44 per cent in June quarter from 6.15 per cent in March quarter.
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