SBI reported its highest quarterly net profit of Rs 6,504 crore for the three months ended June 2021, an increase of 55% over Rs 4,189 crore in the year-ago period.
The increase was on the back of a 24% jump in non-interest income to Rs 11,803 crore from Rs 9,497 crore in the previous year, which included a Rs 1,692-crore recovery from Kingfisher Airlines. SBI chairman Dinesh Khara said that the bank does not see the exposure to Vodafone Idea as stressed. However, the bank was taking steps to insulate the balance sheet from any possible threat.
The bank’s shares rose by over 2% to Rs 457 on Wednesday. SBI has seen an increase in stressed accounts in the retail segment due to the second wave. The bank’s net non-performing assets (NPAs) rose to Rs 43,153 crore as of June 2021 from Rs 42,704 crore a year ago. The increase was significant compared to its March 2021 figure of Rs 36,810 crore. Of the Rs 15,666 crore of slippages, Rs 1,008 crore came from corporates, Rs 6,416 crore from SMEs, Rs 2,920 crore from the farm sector, Rs 5,268 crore from personal loans and Rs 54 crore from international.
Despite the slippages, Khara provided a positive outlook, citing improvement in credit pushing up interest income and a rebound in collections in July. SBI has a significant recovery pipeline of written-off loans, that are in an advanced stage of resolution and could add to other income in coming quarters. The bank’s home loan portfolio that crossed Rs 5 lakh crore last year saw more than half a percentage point rise in bad loans. Khara said that the slippages in retail loans were transitory and that the bank would continue to grow its home loan portfolio. “Hopefully, we should see less than 1% NPA in home loans,” he said.
The bank had similarly seen slippages on its gold loan portfolio, but Khara said that the NPAs would fall as fast as they rose as customers have been returning to the branches to make payments in July after the lockdown ended.
Expressing hope on the pace of vaccination, Khara said that the bank was better placed in the event of a third wave as it could now deliver most of its products digitally to customers.
(With inputs from agencies)