State Bank of India (SBI) beat market estimates by a wide margin to post a 24% rise in net profit to Rs 20,698 crore for the quarter ended 31 March 2024 amid strong loan demand, higher interest income, cost control and lower provisions. 

In the year-ago period, the country’s largest lender reported a net profit of Rs 16,695 crore.

The state-owned bank’s interest earnings jumped to Rs 1.11 lakh crore in the fiscal fourth quarter ended March 2024, up 19% from Rs 92,951 crore a year ago.

Interest expenditure during the quarter increased by 32% to Rs 69,387 crore from Rs 52,559 crore in Q4FY23.

Total income rose to Rs 1.28 lakh crore in Q4FY24, from Rs 1.06 lakh crore a year ago. Operating expenses grew slower at Rs 30,276 crore from the year-ago period's Rs 29,732 crore.

The overall provisions nearly halved to Rs 1,609 crore from Rs 3,315 crore.

Dividend

The SBI board recommended a dividend of Rs 13.70 per share for FY24. The record date for determining the eligibility of shareholders who will receive the dividend on equity shares is 22 May, and the dividend payment date is fixed on 5 June 2024.

NII and NIM

Net interest income (NII) grew 3% year-on-year to Rs 41,655 crore, from over Rs 40,393 crore a year ago. The operating profit for Q4FY24 stood at Rs 28,748 crore.

Domestic net interest margin (NIM) declined by 37 bps to 3.47% in Q4, from 3.84% a year ago. The bank’s NIM in Q3FY24 was at 3.34%.

Advances

The bank’s loan book jumped 15.24% year-on-year to Rs 37,67,535 crore and 5% on a quarter-on-quarter basis. Domestic advances grew 16.26% YoY.

Domestic retail personal loan stood at Rs 13,52,265 crore, up 15% YoY. Of this, home loan disbursed stood at Rs 7,25,818 crore, up 13% YoY.

Credit growth has been robust across all segments, SBI chairman Dinesh Khara said. RAM crossed Rs 20 trillion in FY24 while corporate segment saw healthy growth at 16%. 

Corporate advances and agri loans crossed Rs 11 lakh crore and Rs 3 lakh crore, respectively. 

The bank expects credit growth to sustain at a similar level in FY25. "We will be able to maintain a credit growth trajectory of 15-16% that we had in FY24. Deposit growth would be around 13-14%," said Khara.

Deposits

The deposits during Q4 stood at Rs 49,16,077 crore, an 11% YoY and 3% QoQ jump. Domestic CASA stood at Rs 19,41,996 crore, while domestic term deposit was at 27,82,340 crore.

CASA deposit grew by 4.25%. SBI's CASA ratio stands at 41.11% as on 31 March 2024.

Asset Quality

The bank's asset quality improved in March quarter, with the gross non-performing asset (NPA) standing at 2.24% as against 2.78%.

Khara said gross NPA is the lowest in 10 years.

Net NPA came in at 0.57%, improving by 10 bps YoY.

The bank also saw an impressive 36-quarter low in terms of ratio between gross and net NPAs.

Full Fiscal

For the full fiscal 2023-24, the bank’s net profit stood at Rs 61,077 crore, up 21.59% YoY, after accounting for wage settlement and one-time exceptional item of Rs 7,100 crore. Operating profit grew 12.05% to Rs 93,797 crore.

NII for FY24 was at Rs 1,59,876 crore, up 10.38% YoY. Operating Profit for the full financial year stood at Rs 93,797 crore, up 12.05% YoY.

Whole Bank NIM for FY24 was marginally down by 9 bps YoY to 3.28%. 

The returns on assets (ROA) stood at 1.04% for FY24, up 8 basis points YoY. The return on equity (ROE) was at 20% for FY24, up 89 bps YoY.

On the Reserve Bank of India's draft for provisioning against infra projects, Khara said: "Incremental provisions will not be significant. We will be able to absorb and if this becomes a reality, we will be looking at repricing the loan."