SBI: Q1 profit jumps 55% to highest ever at Rs 6,504 cr

India's largest lender State Bank of India (SBI) on Wednesday reported a 55.3% rise in its Q1 standalone net profit of Rs 6,504 crore as compared to Rs 4,189 crore in the same quarter last year. The bank's net interest income, the difference between interest earned and expended, witnessed a growth of 3.7% at Rs 27,638 crore as against Rs 26,641 crore year-on-year (YoY).

SBI's other income surged in Q1 to Rs 11,802.7 crore as compared to Rs 7,957.5 crore in the year-ago quarter.

On the asset quality front, the gross non-performing asset (NPA) stood at 5.32% versus 4.98% on a sequential basis whereas the net NPA came at 1.77% against 1.50% quarter-on-quarter (QoQ). Slippages, or the fresh addition of bad loans, jumped more than four-fold to Rs 15,666 crore.

The provisions and contingencies dipped to Rs 10,052 crore from Rs 11,150 crore QoQ and Rs 12,501 crore YoY. The total provision for COVID-19 uncertainty as on June 30 is Rs 9,065 crore. Provision Coverage Ratio as on June 30 is 85.93% (87 .75% as on March 31)

''The spread of COVID-19 pandemic across the globe has resulted in decline in economic activities and movement in financial markets. ln this situation, 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 probable inability of the borrowers to meet their obligations against the loans timely,'' SBI said in the filing.

The bank is proactively providing against the challenges of likely stress on the Bank's assets. A definitive assessment of the impact of COVID-19 is dependent upon circumstances as they evolve in the subsequent period, it added. The bank has made an additional provision towards the possible impact of COVID-19 pandemic, on the basis of the evaluation and regular assessment.

Shares of SBI were trading over 2% higher post the earnings announcement at Rs 456 per share on the BSE in Wednesday's afternoon deals.