State Bank of India (SBI) reported a 10.25 per cent increase in net profit for the first quarter at Rs 3,692 crore, compared with Rs 3,349 crore in the comparable period.
Net interest income for the bank grew 3.6 per cent to Rs 13,732 crore as against Rs 13,253 crore in the same quarter, last year.
Domestic net interest margin of the bank declined to 3.29 per cent in Q1FY16 from 3.54 per cent in Q1FY15, due to reduction in base rate by 30 basis points and also because of subdued growth of 5.38 per cent in advances.
Asset quality for the bank improved during the quarter with both gross as well as net non-performing assets witnessing a decline. Gross NPA ratio for the bank during the quarter was down by 61 basis points to 4.29 per cent in Q1FY16 from 4.9 per cent in Q1FY15. Net NPA ratio declined 42 basis points to 2.24 per cent from 2.66 per cent in Q1 of FY15.
According to SBI Chairman Arundhati Bhattacharya, the bank is witnessing a rise in stress in small loans.
“When an economy goes into a tailspin, the first account that goes into a tailspin is that of small and medium enterprises. We are seeing lessening of stress in the mid-corporate segment. Loans above Rs 20 crore are showing visibly less stress while we are seeing more stress in loans less than Rs 1 crore,” Bhattacharya said.
Deposits of the bank during the quarter increased 13.72 per cent from Rs 14,18,915 crore in June 2014, to Rs 16,13,545 crore in June 2015. Savings bank deposits increased 10.14 per cent from Rs 4,89,422 crore in June 2014, to Rs 5,39,050 crore in June 2015, while current account deposits grew 7.95 per cent from Rs 89,710 crore in Jun 2014 to Rs 96,845 crore in June 2015.
As far as credit growth expectations for the fiscal are concerned, Bhattacharya said that the bank would not like to revise the guidance given earlier. “We had given a guidance of 14 per cent credit growth. We see no reason to revise it. Let us see at the end of the next quarter if it needs revision,” Bhattacharya said.
“As far as deposit growth is concerned, we expect a 14-15 per cent deposit growth for FY16,” Bhattacharya added.
Hopes for govt fund infusion
State Bank of India is hopeful of some fund infusion from the government by the end of the second quarter.
“The presentation to the government regarding the fund requirement for the bank has already taken place. We expect some amount of fund infusion from the government to come in this quarter itself,” SBI Chairman Arundhati Bhattacharya said.
“As far as raising funds from the market is concerned, we will definitely make a try when the markets are good,” Bhattacharya added.
Bhattacharya said that the bank is also looking at unlocking value in its insurance subsidiaries and some other ventures.
“Valuations are going on for our two insurance companies. We will have to get the right valuation before the dial-up happens,” Bhattacharya said.