The country's largest lender State Bank of India (SBI) reported a standalone profit of Rs 3,580.81 crore in January-March quarter, a growth of over four-fold YoY supported by lower provisions and stake sale.
Net profit included Rs 2,731.34 crore on sale of certain portion of investment in subsidiary SBI Cards and Payment Services during the quarter.
Net interest income declined 0.8 percent year-on-year to Rs 22,766 crore in the quarter ended March 2020 due to moderate loan growth at 6.4 percent YoY. Domestic net interest margin dipped to 2.94 percent in Q4FY20, down 8 bps YoY and 65 bps QoQ.
Asset quality has seen improvement in the quarter ended March 2020. Gross non-performing assets as a percentage of gross advances declined 42 basis points sequentially to 2.23 percent and net NPAs dropped 79 basis points QoQ to 6.15 percent during the quarter.
Here are the highlights of SBI's Q4 FY20 earnings call compiled by Narnolia Financial Advisors:
The banks believes its strong liability franchise, consistent operating income and core PPOP, diversified loan portfolio, also healthy capital adequacy ratio and leading digital capabilities will help it face the challenges caused due to COVID 19.
The total working capital loans for the banks are Rs 9 lakh crore out of which around 20% have taken the moratorium.
Bank has offered the moratorium to all the customers and will continue to do in second phase of moratorium.
NIM is not expected to improve any further and could remain in current range.
The yield was affected by the interest reversals on AGRI Slippages. The Agri slippages interest reversal was around 20%.
The agri slippage during the year are expected to be less as agriculture segment is expected to be less impacted by COVID 19.
The other income is expected to be impacted during the year due to the pressure on FOREX income and recoveries but it could be compensated through NII growth.
In Housing segment loan, the bank is not much worried as 92% of the customers live in those homes thus higher recovery rate is expected.
Management feels they need not to raise capital in near terms as its capital adequacy is healthy at the current situation.
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