India’s SBI maintains strong credit growth after record profit

The bank on Saturday reported a 74% rise in quarterly net profit, driven by higher credit growth and improved asset quality. Net profit rose to a record 132.64 billion Indian rupees ($1.62 billion) in June-September, beating analysts’ forecast of Rs 105.30 billion, according to data from Refinitiv IBES. Net interest income, the difference between interest earned and paid, rose 13% to Rs 351.82 billion.

Advances grew by 18.15%, while deposits grew by 9.99%. “Our credit growth should be 14-16% in the current financial year,” Chairman Dinesh Kumar Khara Said in a press conference.

“Now, we’ve also got Treasury investments, which we expect to open up. That’s why we’re confident of supporting credit growth,” he said, adding that capacity utilization had improved and business was at pre-pandemic levels. But had returned.

The bank has a term loan pipeline of Rs 2.4 trillion as it sees demand from sectors such as infrastructure, renewables and services.

And, while the bank did not give a target growth for deposits, Khara said SBI will not lag behind the industry. Indian banks saw a 17.95% year-on-year jump in credit growth for the fortnight from October 7, data from the central bank showed, and market participants expect the growth to pick up in the coming months. Deposit growth was 9.63% during this period. A key indicator of profitability, SBI’s core net interest margin (NIM) rose to 3.55% from 3.50% a year ago. It expects to maintain the domestic NIM at the current level. The lender’s asset quality also improved, with gross non-performing assets (NPAs) falling from 3.91% to 3.52% in the last three months. Net NPAs also declined by 20 basis points. Total provisioning declined to Rs 30.39 billion in June-September from Rs 43.92 billion in the previous quarter. The capital adequacy ratio of the bank increased to 13.51% from 13.35% a year ago.

This story has been published without modification in text from a wire agency feed.