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Journalism of Courage
State Bank of India (SBI) on Saturday reported a 6.7 per cent year-on-year (y-o-y) fall in its first quarter net profit to Rs 6,068 crore as losses in the treasury portfolio hurt the bank’s non-interest income.
SBI’s net interest income (NII), or the difference between interest earned and expended, rose 13 per cent y-o-y to Rs 31,196 crore. The domestic net interest margin (NIM) fell 17 basis points (bps) sequentially to 3.23 per cent.
The hit on account of mark-to-market (MTM) losses amounted to Rs 6,549 crore. The MTM hit also had an adverse impact on the SBI’s return on assets (RoA) and return on equity (RoE), which were down 9 bps and 203 bps on a y-o-y basis, respectively.
SBI Chairman Dinesh Khara said the bank was confident of recouping losses in its investment book over the course of the year.
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The Reserve Bank of India’s back-to-back rate hikes in May and June led to a firming up of yields in Q1FY23 and hit most banks’ bond portfolios.
On Saturday, Khara said more than the rate hike, SBI’s treasury performance will be a function of how yields on government bonds move. FE
