MUMBAI: SBI reported a sharp 84.3% rise in net profit for Q3FY25, reaching Rs. 16,891 crore from Rs. 9,164 crore in Q3FY24. The jump was due to the absence of a one-time Rs. 7,100 crore provision for pension liabilities in Q3FY24 and a drop in operating expenses. Employee provisions declined 61.5% to Rs. 3,672 crore from Rs. 9,554 crore in the same quarter last year.
Last year, the bank had to make a one-time provision toward pensions after the central board decided to have a uniform 50% rate for pensions for all retired employees, as against an earlier formula of 40% and 50%. The change resulted in an actuarial valuation of the liabilities, showing that the bank would have to set aside more for retired employees.
Net interest income grew 4.1% to Rs. 41,446 crore from Rs. 39,816 crore. However, net interest margin fell 21 bps YoY to 3.01% for the whole bank and 19 bps YoY to 3.15% for domestic operations due to the rising cost of deposits.
“While it may not be possible to sustain an 84% growth in net profit, we want to maintain in terms of continuity and consistency our goals of 1% return on assets and 15% return on equity,” said CS Setty chairman State Bank of India. Setty said that were RBI to cut rates tomorrow, it would be immediately passes on to 28.3% of borrowers who have taken loans linked to the external benchmark rate while the reduction in cost in deposits would take longer.
“Our consistent guidance on credit growth is 14 to 16%. Based on what we see in the corporate loan pipeline, as well as in the month of January in retail and home loans, we are confident that we will be meeting that guidance,” said Setty.
Operating expenses fell 6.5% to Rs. 28,935 crore from Rs. 30,939 crore, reflecting cost control measures. Total provisions increased 63.5% to Rs. 6,659 crore from Rs. 4,072 crore, driven by a 31.2% rise in loan loss provisions. Deposits grew 9.8% YoY to Rs. 52.3 lakh crore, led by a 13.5% rise in term deposits and a 4.5% increase in CASA deposits. Advances grew 13.5% YoY to Rs. 40.7 lakh crore, with strong growth in domestic and foreign office advances.
Asset quality improved, with the gross NPA ratio declining to 2.07% and the net NPA ratio to 0.53%. Credit cost stood at 0.24%. The capital adequacy ratio was 13.03%. The bank continued its digital push, with over 98% of transactions occurring through alternate channels. YONO had 8.45 crore registered users, with 64% of new savings accounts opened digitally.
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I’m JP, a 26-year-old from Odisha, India 🇮🇳 and the founder of newsxbyte.com 📰. I write articles and news on a variety of topics, including business, finance 💼, and exam updates 📚. With a passion for journalism and digital content, I strive to keep my readers informed and engaged with the latest updates and insights.
