Results     19-May-23
Analysis
State Bank of India
Healthy improvement in margins and asset quality with strong loan growth
State Bank of India on standalone basis has recorded strong 83% surge in the Net Profit to Rs 16694.51 crore for the quarter ended March 2023 (Q4FY2023), driven healthy performance across all parameters. Bank has posted robust improvement in asset quality on sequential basis as well as over a year earlier level. Bank has improved Net Interest Margin (NIM) to 3.37% supporting Net Interest Income (NII) growth to accelerate in Q4FY2023. Bank has maintained healthy business growth at 12% end March 2023. Bank has also maintained nearly stable CASA deposits ratio at 43.8% at end March 2023.

Asset quality improving: Bank has improved the asset quality on sequential as well as year-on-year basis in Q4FY2023.

Fresh slippages of advances dipped to Rs 3185 crore (annualized 0.7% of advances in Q4FY2023) compared with Rs 3098 crore (0.7%) in the previous quarter.

Recoveries, upgradations and write-offs together were healthy at Rs 10876.72 crore in Q4FY2023.  

Segment wise GNPA ratio for retail segment stood at 3.02%, corporate 3.55% and international 0.40% end March 2023. Within retail, the GNPA ratio for agriculture stood at 11.47%, personal 0.63%, SME 4.76% etc.

The SMA 1 loan book declined to Rs 2465 crore and SMA 2 to Rs 795 crore end March 2023.

The bank has improved provision coverage ratio to 91.9% at end of March 2023 from 90.2% end March 2022.

The Capital adequacy ratio stood at 14.68% with Tier I ratio at 12.06%. The ratio of risk weighted assets to total assets stood at 50.5% end March 2023.

Asset Quality Indicators: State Bank of India

 

Mar-23

Dec-22

Sep-22

Jun-22

Mar-22

Variation

QoQ

YoY

Gross NPA (Rs Crore)

90927.78

98346.50

106804.14

113271.72

112023.37

-8

-19

Net NPA (Rs Crore)

21466.64

23484.31

23572.19

28257.92

27965.71

-9

-23

% of GNPA

2.78

3.14

3.52

3.91

3.97

-36

-119

% of NNPA

0.67

0.77

0.80

1.00

1.02

-10

-35

Provision coverage ratio %

91.91

91.52

91.54

90.14

90.20

39

171

CRAR Basel III %

14.68

13.27

13.51

13.43

13.83

141

85

    Tier I - Basel III %

12.06

10.80

11.12

11.15

11.42

126

64

Variation in basis points for figures given in percentages and in % for figures in Rs crore

 

Business Highlights:

Healthy business growth: Business of the bank increased 12% yoy to Rs 7693020 crore at end March 2023. Deposits increased 9% at Rs 4423778 crore, while advances improved 16% at Rs 3269242 crore at end March 2023.

Domestic advances moved up 15% to Rs 2776802 crore, while international advances also surged 20% yoy to Rs 492440 crore at end March 2023.

The credit-deposit ratio of the bank eased to 73.9% at end March 2023 from 74.4% a quarter ago.

Retail credit driving loans growth: Of the domestic advances, the retail credit improved at strong pace of 18% to Rs 1179152 crore. The SME credit increased higher pace of 18% to Rs 359270 crore at end March 2023 and the agriculture credit rose 13% to Rs 258612 crore at end March 2023. Large corporate credit increased 13% yoy to Rs 979768 crore.

CASA ratio eases: Deposits grew 9% yoy to Rs 4423778 crore in the quarter under review. Domestic deposits grew 9% yoy to Rs 4253571 crore of which CASA deposits grew 5% yoy to Rs 1862904 crore. Domestic CASA ratio declined 148 bps yoy to 43.8% at end March 2023. Overseas deposits moved up 30% to Rs 170207 crore at end March 2023.

Network expansion: Bank has added 24 branches in the quarter under review, taking the total branch count up to 22405 at end March 2023. ATMs count of the bank has increased to 65627 ATMs end March 2023.

Book Value per share stood at Rs 340.9 per share at end March 2023, while the adjusted book value (net of NNPA and 25% of restructured assets) stood at Rs 305.1 per share at end of March 2023.

Quarterly Performance:

NII growth accelerates, as NIM improves: Bank has posted 29% rise in NII at Rs 40392.51 crore for quarter ended March 2023. Interest earned moved up 31% to Rs 92951.06 crore, driven by interest earned on investment rising 15% to Rs 26138.25 crore. Meanwhile, the interest expended rose 33% to Rs 52558.55 crore. NIM of the bank improved to 3.37% in Q4FY2023 from 3.29% in the previous quarter supporting NII growth.

Treasury income and other income boosts non-interest income: Non-interest income of the bank increased 18% to Rs 13961.40 crore in Q4FY2023, driven by jump in profit on sale of investment at 911% to Rs 1800 crore and 94% surge in other miscellaneous income to Rs 4187 crore. However, the core fee income was flat at Rs 8003 crore and there was loss of Rs 29 crore in forex segment.

Stable expense ratio: Net total income of the bank increased 26% to Rs 54354 crore in Q4FY2023, while the operating expenses rose 27% to Rs 29733 crore. Expense ratio was steady at 54.7% in Q4FY2023 from 54.2% in Q4FY2022. The employee expenses surged 40% to Rs 17616.43 crore, while other operating expenses increased 12% to Rs 12116.37 crore in Q4FY2023.

The operating profit galloped 25% to Rs 24621.11 crore in Q4FY2023.

Provisions dips on lower NPA provisions: The provisions and contingencies declined 54% to Rs 3315.71 crore in Q4FY2023 over Q4FY2022, led by 61% dip in NPA provisions to Rs 1278 crore, while the investment provisions declined 99% to Rs 18.00 crore. The standard assets provisions jumped 511% to Rs 2558 crore in Q4FY2023.

With the surge provisions, the PBT increased 71% to Rs 21305.40 crore in the quarter ended March 2023.

Tax rate eases: The effective tax rate eased to 21.6% in Q4FY2023 from 27.0%, in Q4FY2023, leading to further 83% surge in the net profit to Rs 16694.51 crore for quarter ended March 2023.

Standalone Financial Performance FY2023:

For the year ended March 2023 (FY2023), Bank posted 59% increase in net profit to Rs 50232.46 crore. The net interest income improved 20% to Rs 144840.51 crore, while non-interest income declined 10% to Rs 36615.60 crore in FY2023. The expense ratio rose 55 bps yoy to 53.9% in FY2023. The operating expenses rose 14% to Rs 97743.13 crore, while provision and contingencies dipped 32% to Rs 16507.33 crore in FY2023. The profit before tax improved 32% to Rs 67205.65 crore in FY2023. The effective tax rate declined 179 bps yoy to 25.3%. Net profit moved up 59% to Rs 50232.46 crore in FY2023.

Consolidated quarterly performance:

On the consolidated front, the bank has posted 89% increase in the net profit at Rs 18093.84 crore over 29% rise in NII at Rs 44631.71 crore. The other income increased 16% to Rs 38769.20 crore, leading to 22% rise in net total income to Rs 83400.91 crore. The operating expenses rose 22% to Rs 56170.81 crore, allowing the operating profit to increase 24% to Rs 27230.10 crore in the quarter ended March 2023. The provisions plunged 53% to Rs 3794.53 crore, PBT dipped 69% to Rs 23435.57 crore in Q4FY2023.

The effective tax rate declined to 21.3% in Q4FY2023 from 27.5% in Q4FY2022, allowing the net profit to move up 84% to Rs 18768.76 crore before minority interest and share of associates. The minority interest increased 5% to Rs 674.92 crore, while the profit from associate companies moved up 115% to Rs 425.51 crore. Net Profit increased 89% to Rs 18093.84 crore for quarter ended March 2023.

Net profit of non-banking subsidiaries increased 12% to Rs 1757 crore in Q4FY2023, driven by SBI Life 16% to Rs 777 crore, SBI Funds Management 16% to Rs 329 crore, SBI Cards & Payment Services 3% to Rs 596 crore and SBI General Insurance 83% to Rs 55 crore in Q4FY2023,

Consolidated Financial Performance FY2023:

For the year ended March 2023 (FY2023), Bank on consolidated basis has posted 57% increase in net profit to Rs 55648.18 crore. The net interest income improved 20% to Rs 160863.77 crore, while non-interest income rose 5% to Rs 122533.56 crore in FY2023. The expense ratio rose 41 bps yoy to 67.0% in FY2023. The operating expenses increased 14% to Rs 189814.48 crore, while provision and contingencies increased dipped 32% to Rs 18184.28 crore in FY2023. The profit before tax improved 32% to Rs 75398.57 crore in FY2023. The effective tax rate declined 187 bps yoy to 24.6%. Net profit advanced 57% to Rs 55648.18 crore in FY2023.

State Bank of India: Standalone Results

Particulars

2303 (3)

2203 (3)

Var %

2303 (12)

2203 (12)

Var %

Interest Earned

92951.06

70733.25

31

332103.07

275457.29

21

Interest Expended

52558.55

39535.39

33

187262.56

154749.70

21

Net Interest Income

40392.51

31197.86

29

144840.51

120707.59

20

Other Income

13961.40

11880.15

18

36615.60

40563.91

-10

Net Total Income

54353.91

43078.01

26

181456.11

161271.50

13

Operating Expenses

29732.80

23361.18

27

97743.13

85979.13

14

Operating Profits

24621.11

19716.83

25

83712.98

75292.37

11

Provisions & Contingencies

3315.71

7237.45

-54

16507.33

24452.13

-32

PBT before EO

21305.40

12479.38

71

67205.65

50840.24

32

EO

0.00

0.00

-

0.00

-7418.39

-

PBT after EO

21305.40

12479.38

71

67205.65

43421.85

55

Provisions for Tax

4610.89

3365.85

37

16973.19

11745.87

45

Net Profit

16694.51

9113.53

83

50232.46

31675.98

59

EPS*(Rs)

74.8

40.8

 

56.3

41.6

 

Adj BV (Rs)

305.1

247.6

 

305.1

247.6

 

* Annualized on current equity of Rs 892.46 crore. Face Value: Rs 1, Figures in Rs crore

Source: Capitaline Corporate Database

 

State Bank of India: Consolidated Results

Particulars

2303 (3)

2203 (3)

Var %

2303 (12)

2203 (12)

Var %

Interest Earned

98083.19

74607.57

31

350844.58

289972.69

21

Interest Expended

53451.48

39943.86

34

189980.81

156194.34

22

Net Interest Income

44631.71

34663.71

29

160863.77

133778.35

20

Other Income

38769.20

33427.11

16

122533.56

117000.40

5

Net Total Income

83400.91

68090.82

22

283397.33

250778.75

13

Operating Expenses

56170.81

46123.95

22

189814.48

166945.04

14

Operating Profits

27230.10

21966.87

24

93582.85

83833.71

12

Provisions & Contingencies

3794.53

8109.18

-53

18184.28

26676.69

-32

PBT

23435.57

13857.69

69

75398.57

57157.02

32

P&L of Associate Company

425.51

197.49

115

1191.45

827.01

44

PBT before EO

23861.08

14055.18

70

76590.02

57984.03

32

EO

0.00

0.00

-

0.00

-7418.39

-

PBT after EO

23861.08

14055.18

70

76590.02

50565.64

51

Provisions for tax

5092.32

3863.93

32

18840.13

13382.46

41

Net Profit before minority interest

18768.76

10191.25

84

57749.89

37183.18

55

Minority Interest

674.92

642.12

5

2101.71

1809.30

16

Net profit

18093.84

9549.13

89

55648.18

35373.88

57

EPS*(Rs)

81.1

42.8

 

62.4

45.7

 

Adj BV (Rs)

340.2

276.2

 

340.2

276.2

 

* Annualized on current equity of Rs 892.46 crore. Face Value: Rs 1, Figures in Rs crore,

Source: Capitaline Corporate Database

 

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