Shocking SBI’s Q3 Report Reveals Surprising Profit Slump – What’s Really Going On Inside India’s Banking Giant?

SBI’s Q3 Report : On February 3, the State Bank of India (SBI) reported its Q3 standalone net profit at ₹9,164 crore, reflecting a 35% decline in the December quarter, as disclosed in a stock exchange filing.

Factors Influencing SBI’s Q3 Net Profit

The bank attributed the decline in net profit for the October-December quarter to higher operating expenses.

Year-to-Date Profit Growth

In the first nine months of FY24, SBI’s profit reached ₹40,378 crore, marking a notable 20.40% increase compared to the same period in the previous fiscal year, which reported ₹33,538 crore.

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Segment-wise Growth

SBI witnessed approximately 14.38% year-on-year (YoY) growth across all segments. Corporate advances crossed ₹10 trillion, while SME advances surpassed ₹4 trillion, indicating expansion in both sectors.

Key Financial Ratios

Return on Assets (ROA)

9MFY24 saw an increase in ROA to 0.94%, up by 7 basis points (bps) from 9MFY23.

Return on Equity (ROE)

ROE stood at 19.47% for 9MFY24, reflecting an 88 bps improvement over the same period in the previous fiscal.

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Non-Performing Assets (NPA) Improvement

Gross NPA improved to 2.42%, a reduction of 72 bps compared to the previous year. Net NPA also improved at 0.64%, down by 13 bps YoY.

Credit Cost

The Credit Cost for 9MFY24 was reported at 0.25%, indicating a 12 bps improvement from the same period in the previous fiscal year.

Provision Coverage Ratio (PCR)

PCR reached 74.17%, and when including Additional Unsecured Credit Amount (AUCA), it stood at 91.49%.

Non-NPA Provisions

Total non-NPA provisions, not included in PCR, amounted to ₹33,472 crore, constituting approximately 149% of Net NPAs at the end of Q3FY24.

Advances Business and Analyst Expectations

Around ₹95,142 crore in advances business were sourced through Analytical leads, indicating a 37% growth YoY. Analysts, including Shreyansh Shah, Research Analyst at StoxBox, expected the decline and anticipate a positive outlook. Shah stated, “We expect the banking elephant SBI to come out with a good set of numbers in Q3FY24,” predicting mid-teen-digit growth in profitability driven by high disbursals of advances and other income growth.

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