SBI Q2 net profit jumps 25% to Rs 3,879 crore

Bhattacharya credits steady loan book growth

India’s largest lender State Bank of India on Friday reported a 25.12 per cent increase in net profit for the second quarter ended September 30, 2015, at Rs 3,879 crore compared with Rs 3,100 crore in Q2 of last year.

Net interest income for the bank during the quarter increased by 7.37 per cent to Rs 14,253 crore from Rs 13,275 crore an year ago.

“The increase in profits were aided by the repatriation in profits from abroad to the tune of Rs 485 crore, a steady growth in loan book and stability in asset quality,” SBI chairman Arundhati Bhattacharya said. Asset quality for the bank declined during the quarter with gross non performing assets ratio at 4.15 per cent compared to 4.89 per cent an year ago. Net NPA ratio also declined marginally to 2.14 per cent from 2.73 per cent in the second quarter of the previous fiscal.

Staff expenses during the quarter increased 10.39 per cent from Rs 5,564 crore in Q2FY15 to Rs 6,142 crore in Q2FY16 with the overheads being contained at 7.24 per cent (YoY).

Bhattacharya said that the bank could see further improvement in asset quality going forward. “The economy is on the mend but still needs to move up before we witness stability in asset quality,” Bhattacharya said.

“There are one to two accounts which have some worries on asset quality front. Even assets of those accounts are good and the hits from them could be temporary. We are confident about quality of assets going forward,” Bhattacharya added.

According to Bhattacharya, the bank will continue monetising non-core assets and strategic investments. “We will continue looking at monetising our non core assets, strategic investments and joint ventures. To give a timeline to these stake sales is difficult,” Bhattacharya said.

The government wants us to do this, Bhattacharya said, adding that the bank is also open to buying stakes in strategic ventures.