SBI's Q2 Profit Jumps 28%, Total Income Rises 15% to INR 1.29 Lakh Crore; Stock Falls 2.47% Post Results
Overview
State Bank of India (SBI), the largest lender in India, reported a strong set of financial results for the second quarter (Q2) of FY23, with a notable increase in profit and total income. The bank's net profit for the quarter rose by 28% year-on-year (YoY) to INR 15,704 crore, primarily driven by higher net interest income and fee income.
SBI's total income also witnessed a significant increase of 15% YoY to INR 1.29 lakh crore during the quarter. This growth was mainly attributed to an expansion in net interest income, which rose by 14.5% YoY to INR 50,911 crore.
Key Highlights
- Net profit for Q2 FY23: INR 15,704 crore, up 28% YoY
- Total income for Q2 FY23: INR 1.29 lakh crore, up 15% YoY
- Net interest income for Q2 FY23: INR 50,911 crore, up 14.5% YoY
- Fee income for Q2 FY23: INR 9,597 crore, up 12.4% YoY
- Provisions and contingencies for Q2 FY23: INR 6,923 crore, down 26.2% YoY
- Gross non-performing assets (GNPAs) as of September 30, 2022: 3.93%, down from 4.60% a year ago
- Net non-performing assets (NNPAs) as of September 30, 2022: 1.29%, down from 1.69% a year ago
- Capital adequacy ratio (CAR) as of September 30, 2022: 13.34%, well above the regulatory requirement
Market Reaction
Despite the strong financial performance, SBI's stock price fell by 2.47% on the day of the results announcement, closing at INR 590.85 on the National Stock Exchange (NSE). Analysts attribute the decline to profit-booking by investors after the recent rally in the stock price.
Management Commentary
Commenting on the results, SBI Chairman Dinesh Khara said, "The bank has delivered a robust performance in Q2 FY23, with strong growth in net interest income and fee income. The improvement in asset quality is also encouraging, with a significant reduction in both gross and net NPAs."
Khara further added, "We remain cautiously optimistic about the future and will continue to focus on maintaining strong asset quality, growing our business in a sustainable manner, and delivering value to our stakeholders."
Conclusion
SBI's Q2 FY23 results showcase the bank's resilience and strong fundamentals. The bank has been able to navigate the challenging economic environment effectively and maintain healthy financial metrics. While the market's immediate reaction to the results was negative, SBI's long-term prospects remain positive, and the stock is expected to recover from its recent dip.
