India's Largest Bank, SBI Posts Record Profit in Q4

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
  • Home
  • Views On News
  • May 22, 2021 - India's Largest Bank, SBI Posts Record Profit in Q4

India's Largest Bank, SBI Posts Record Profit in Q4

May 22, 2021

State Bank of India (SBI) reported a record standalone net profit of Rs 64.5 bn for the quarter ended March on the back of lower provisions for bad loans.

The fourth-quarter profit is a big jump from Rs 35.8 bn in the year-ago period.

The net interest income (NII) of the PSU bank, the difference between interest earned and interest expended, grew by 18.9% year-on-year (YoY) to Rs 270.7 bn in Q4FY21, on the back of loan growth of 5% YoY.

Non-interest income (other income) of the bank increased by 21.6% YoY to Rs 162.3 bn in Q4FY21.

As a result, the pre-provision operating profit (PPOP) jumped by 25.2% to Rs 197 bn during the same period.

Bank Lowers Provisions on Improving Asset Quality

The bank saw its asset quality improve during the quarter with the gross non-performing assets (NPA) as a percentage of gross advances falling by 0.5% sequentially to 4.98%.

The net NPA in the same period declined by 0.3% quarter-on-quarter (QoQ) to 1.5%.

Segmental Gross NPA

Slippages during the quarter stood at Rs 219.3 bn, while upgrades and recoveries stood at Rs 43.3 bn.

SBI reported retail slippages worth Rs 29.4 bn, agricultural slippages worth Rs 72.5 bn and corporate slippages worth Rs 64.5 bn.

--- Advertisement ---
LAST CHANCE: Super Smallcaps Summit (Urgent Action Required)

Last chance. It's now or never...

The Super Smallcaps Summit with Richa Agarwal goes LIVE at 5 pm today...

At this summit, Richa will reveal the details of 3 Super Smallcaps with the potential to soar by hundreds...and even thousands of percent over the long term...

So make sure you don't miss it...

Grab Your Free Spot Right Now
------------------------------

As of 31 March 2021, SBI said that it had restructured loans worth Rs 53.2 bn under the Reserve Bank of India's one-time restructuring scheme for borrowers affected by the Covid-19 pandemic.

This included retail loans worth Rs 27.6 bn and corporate loans worth Rs 25.5 bn. The bank holds provisions worth Rs 11.2 bn against these loans. Total bad loan provisions fell to Rs 99.1 bn, down 16.6% YoY.

Overall, the total provisions and contingencies of the bank fell 18.1% YoY to Rs 110.5 bn but still remains at elevated levels. Sequentially, the same increased by 6.9%.

According to Dinesh Khara, Chairman, SBI, the bank is expecting asset quality pressures to abate during the current financial year.

While the bank is watching for the impact of the second wave of Covid-19 cases, at present the collection efficiency is at 96%.

Corporate Loan Book Contracts Due to the Pandemic

The bank's total domestic advances for the year rose 5.7% to Rs 21.8 tn.

Retail advances stood at Rs 8.7 tn, rising 16.5% from a year ago. In comparison, the domestic corporate loan book contracted 3% YoY.

Including investment in corporate securities, the corporate book increased marginally.

The drop in the outstanding corporate loan book was largely because companies did not utilize available credit lines, the bank's chairman said.

Large projects where the bank has already sanctioned credit lines did not take off due to the pandemic. However, as the situation normalises, these credit lines are expected to get utilised and push growth for the bank.

SBI Advances - FY20 vs FY21

In the retail segment, SBI saw its gold loans portfolio gain traction.

As of 31 March, the gold loan book, inclusive of agricultural and personal retail loan borrowers, stood at Rs 900 bn. The bank sees an opportunity to add another Rs 100 bn this financial year.

Total domestic deposits for SBI rose 14.26% from a year ago to Rs 35.7 tn.

The current account and savings account (CASA) deposits rose 16.7% YoY to Rs 16.5 tn whereas term deposits rose 12.2% from a year ago to Rs 19.2 tn.

Equitymaster's Stock Screener: Identifying High-Potential Stocks Has Never Been this Easy

FY21 Highlights

For the year FY21, the bank reported a net profit of Rs 204 bn, up by 40.9% from Rs 145 bn in FY20, driven by an increase in pre-provision operating profit and lower tax expenses.

The bank's net interest income grew by 12.9% compared to the previous year while its operating profit grew by 5% YoY.

The bank has reportedly received a windfall of nearly Rs 40 bn rupees as part of dues owed by bankrupt steelmaker Bhushan Power and Steel.

With respect to the dividend, the bank has declared a dividend of Rs 4 per equity share for the year FY21.

This is the first payout since May 2017, when it had rewarded shareholders with Rs 2.6 per share.

The date of payment of the dividend is fixed on 18 June 2021.

On the impact of Covid-19 on the bank, the management said -

"The spread of the pandemic across the globe has resulted in a decline in economic activity and an increase in movement in financial markets. In this situation, the bank is gearing up itself on all fronts to meet the challenges.

The situation continues to be uncertain and the bank is evaluating the situation on an ongoing basis. Major challenges for the Bank could be from extended working capital cycles, fluctuating cash flow trends and the probable inability of the borrowers to meet their obligations against the loans timely."

The bank is also proactively providing against the challenges of likely stress on the bank's assets. A definitive assessment of the impact of COVID-L9 is dependent upon circumstances as they evolve in the subsequent period."

--- Advertisement ---
REVEALED: Multibagger Stock Ideas for The Next 10 Years...

Electric vehicles...

Renewable energy...

E-commerce...

From where will the biggest winners of the next decade come from?

The Answer Will Surprise You
------------------------------

How the Stock Markets Reacted to State Bank of India's Q4 Results...

State Bank of India shares opened at Rs 390.5 on the BSE and at Rs 390.0 on the NSE yesterday.

Shares of the bank rose 4.3% and 5.0%, respectively in intra-day after the bank reported its results.

They are now up about 40% so far this year (YTD) and have surged 151% in the last year.

The scrip touched its 52-week high of Rs 426.45 on 18 February 2021, and its 52-week low of Rs 149.55 on 22 May 2020.

At its current price, it is trading at a P/BV ratio of 1.4.

About State Bank of India

State Bank of India (SBI) is an Indian multinational, public sector banking and financial services statutory body headquartered in Mumbai, Maharashtra.

It is the 43rd largest bank in the world and ranked 221st in the Fortune Global 500 list of the world's biggest corporations and is the only Indian bank on the list.

It is also the largest bank in India with a 23% market share by assets and a 25% share of the total loan and deposits market.

The bank descends from the Bank of Calcutta, founded in 1806 via the Imperial Bank of India, making it the oldest commercial bank in the Indian Subcontinent.

The Government of India took control of the Imperial Bank of India in 1955, with the Reserve Bank of India (India's central bank) taking a 60% stake, renaming it to the State Bank of India.

For more details about the bank, you can have a look at SBI's factsheet and SBI's quarterly results on our website.

You can also compare State Bank of India with its peers.

SBI vs HDFC Bank

SBI vs Bank of India

SBI vs Axis Bank

SBI vs IndusInd Bank

SBI vs DCB Bank

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

Ayesha Shetty

Ayesha Shetty is a financial writer with the StockSelect team at Equitymaster. An engineer by qualification, she uses her analytical skills to decode the latest developments in financial markets. This reflects in her well-researched and insightful articles. When she is not busy separating financial fact from fiction, she can be found reading about new trends in technology and international politics.

Equitymaster requests your view! Post a comment on "India's Largest Bank, SBI Posts Record Profit in Q4". Click here!

  

More Views on News

SBI Announces Quarterly Results (1QFY22); Net Profit Up 44.9% (Quarterly Result Update)

Aug 5, 2021 | Updated on Aug 5, 2021

For the quarter ended June 2021, SBI has posted a net profit of Rs 75 bn (up 44.9% YoY). Sales on the other hand came in at Rs 690 bn (down 1.4% YoY). Read on for a complete analysis of SBI's quarterly results.

SBI Announces Quarterly Results (3QFY21); Net Profit Down 6.9% (Quarterly Result Update)

Feb 5, 2021 | Updated on Feb 5, 2021

For the quarter ended December 2020, SBI has posted a net profit of Rs 52 bn (down 6.9% YoY). Sales on the other hand came in at Rs 667 bn (down 1.4% YoY). Read on for a complete analysis of SBI's quarterly results.

5 Indian Banks with the Lowest NPAs. Here's How they Did It... (Views On News)

Sep 27, 2021

These banks have managed to maintain their asset quality even in the middle of a pandemic.

PNB Reports an Over Three-Fold Jump in Net Profit as Provisions Fall (Views On News)

Aug 3, 2021

The reduction in provisions for bad loans and asset quality stability may have aided the lender's earnings.

Here's Why IndusInd Bank's Net Profit Doubled in the June Quarter (Views On News)

Jul 28, 2021

All you need to know about the latest quarterly results of IndusInd Bank.

More Views on News

Most Popular

All You Need to Know About Primary and Secondary Markets

A look at the various types of primary and secondary markets and the key differences between them.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

How to Hit Rs 100 Crore Wealth in Your Lifetime (Equitymaster Wealth)

Nov 15, 2021

This is how you can achieve the ambitious goal of a net worth of Rs 100 crore.

Don't Sell these Stocks if the Market Falls (Profit Hunter)

Nov 17, 2021

These are the 3 types of stocks that you should not sell in a market crash.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

SBI SHARE PRICE


Nov 26, 2021 (Close)

TRACK SBI

SBI - WELLS FARGO COMPARISON

COMPARE SBI WITH

MARKET STATS