SBI Q4 profit up 80% at Rs 6,451 crore

SBI’s net profit increased 80.1 percent year on year (YoY) to Rs 6,451 crore in the fourth quarter ended March 2021, exceeding analysts’ expectations thanks to higher net interest income (NII) and lower provisions. In Q4FY20, it made a net profit of Rs 3,581 crore. In comparison to Rs 5,196 crore in Q3FY21, net profit increased by 24.14 percent.

Standalone (banking operations) net profit increased 40.88 percent to Rs 20,410 crore in FY21, compared to Rs 14,488 crore the previous year, while combined net profit increased 13.34 percent to Rs 22,405 crore. These are the country’s largest lender’s highest-ever annual earnings.

For the fiscal year ending March 2021, the board of directors announced a dividend of Rs 4 per share (400%) to shareholders. On the BSE, its stock closed 4.3 percent higher at Rs 401.1 per share, reflecting market sentiment. On the NSE, it was trading at Rs 404, up more than 5%.

After the first quarter, the bank will provide guidance on parameters such as credit cost and recovery in the second wave (Q1FY22). In the reporting period, its NII increased by 19% to Rs 27,067 crore, up from Rs 22,767 crore in Q4FY21. NII, on the other hand, fell 6.08 percent sequentially from Rs 28,820 crore in Q3FY21.

Domestic net interest margin increased by 17 basis points to 3.11 percent in Q4FY21, up from 2.94 percent the previous quarter (FY20). However, the margin fell 23 basis points sequentially from 3.34 percent in Q3FY21. The sum set aside for bad loans, known as loan loss provisions, fell 16.64 percent to Rs 9,914 crore in Q4FY21 from Rs 11,894 crore in Q4FY20. Provisions increased by 332.9 percent sequentially from Rs 2,290 crore.

From 83.62 percent a year earlier, the provision coverage ratio rose to 87.75 percent in March 2021. The bank is keeping a close eye on stressed loans and currently has no concerns about asset quality. In March 2021, SBI’s gross non-performing assets (NPAs) fell to 4.98 percent from 6.15 percent in March 2020. They were down sequentially from the proforma stage of 5.44 percent in Q3FY21. Net NPAs were 1.50 percent in December 2020, down from 2.23 percent in March 2020 and 1.81 percent in December 2020. (Q3FY21).

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