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One-time gains boosts SBI Q4 net, but 23% of loan book comes under moratorium

SBI made a profit of Rs 2,731 crore from sale of its investment in SBI Cards, which came out with an IPO during the quarter.

SBI has made Covid provisions of Rs 938 crore against accounts with outstanding of Rs 6,250 crore, which would have turned NPA as on March 31, 2020. (Source: Bloomberg)

Aided by profit from sale of investment in its subsidiary and improvement in the asset quality, State Bank of India (SBI) on Friday said it registered a net profit of Rs 3,581 crore in the fourth quarter ended March 2020, an increase of 327 per cent from Rs 838 crore in the same period of last year.

The state-owned bank made a profit of Rs 2,731 crore from sale of its investment in SBI Cards, which came out with an IPO during the quarter. SBI’s asset quality improved during the quarter, and gross non-performing assets (NPAs) improved to 6.15 per cent of advances (Rs 1,49,091 crore) during the quarter from 7.53 per cent (Rs 1,72,750 crore) a year ago.

SBI Chairman Rajnish Kumar said a total of 21.8 per cent of its customers availed the RBI moratorium offer. In terms of the loan value, as much as 23 per cent of the loan book is under moratorium. This means loans worth Rs 5.57 lakh crore — out of total loan book of Rs 24.22 lakh crore — is under moratorium with repayment at standstill. The impact of the lockdown will be known only in September when moratorium ends on August 31.

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The bank said credit offtake is likely to remain muted. Credit growth will likely be around 7.5 per cent in the financial year ended 2021, down from its earlier projected growth of 12 per cent. The June quarter would not be a great quarter for loan recovery, but that would pick up from September, Kumar said.

The bank has made Covid provisions of Rs 938 crore against accounts with outstanding of Rs 6,250 crore, which would have turned NPA as on March 31, 2020. For the full year FY20, net profit stood at Rs 14,488 crore against a net profit of Rs 862 crore in FY19. This is also the highest ever yearly net profit recorded by the bank.

Net interest income grew by 11.02 per cent on a year-on-year (y-o-y) basis in FY20. Domestic net interest margin improved to 3.19 per cent in FY20, registering an increase of 24 bps.

Total deposits grew at 11.34 per cent, while credit growth stood at 5.64 per cent y-o-y, mainly driven by retail (personal) advances (15.40 per cent growth) and foreign office advances (18.05 per cent). Home loan, which constitutes 22 per cent of bank’s domestic advances, grew 13.86 per cent.

Slippages fell to Rs 8,150 crore from Rs 16,525 crore in the preceding quarter. But it rose compared to Rs 7,505 crore a year ago. About Rs 6,200 crore worth of loans are under standstill as they would have turned NPA in March, but are protected under the moratorium.

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