The country’s largest public lender, State Bank of India (SBI), on Saturday announced a 10% year-on-year decline in net profit to Rs 18,643 crore in the fourth quarter of the previous financial year, impacted by increase in provisioning for bad loans. The lender’s bottomline beat expectations, as Bloomberg analysts had estimated the bank to post Rs 17,800 crore net profit in the quarter.
The banks’ board on Saturday approved plans to raise up to Rs 25,000 crore in the current financial year through a qualified institutions placement (QIP) or follow-on public offer (FPO) or any other permitted mode or a combination. The provisions for non-performing assets rose 20% to Rs 3,964 crore during the March quarter. The bank is expecting credit growth to dip during the current financial year.
“Our earlier guidance (for credit growth) was 14%-16%, we are moderating that to 12%-13%. The system level credit growth probably would be 10%-11%,” said CS Setty, chairman, SBI, at the post earnings press conference.
The net interest income, the difference between interest earned and paid, rose 2.7% to Rs 42,775 crore in the March quarter of FY2025 from Rs 41,655 crore in the same quarter a year ago.
The net interest margin (NIM) of the lender shrunk to 3.15% in the fourth quarter of the previous financial year from 3.47% in the same quarter of FY2024. He expects NIM to come under pressure during the year due to repo rate cuts by the Reserve Bank of India.
“We expect another 50 basis points rate cuts and starting with 25 basis point in the next MPC, which means there is definitely going to be some pressure on the margins,” he said.
Its advances grew 12% year-on-year to Rs 42 lakh crore in the fourth quarter while deposits grew 9.5% to cross the Rs 53-lakh mark. CASA (current account savings account) deposits increased 6.34%. SBI has a corporate loan pipeline of Rs 3.4 lakh crore as of March this year.
Setty said the bank is witnessing some moderation in corporate loan growth, mainly due to prepayments by large borrowers. The bank improved its asset quality as gross non-performing assets (GNPA) ratio declined to 1.82% as of March this year from 2.07% as of December 2024 and from 2.24% as of March 2024. The capital adequacy ratio of the lender stood at 14.5%.
Setty said the bank has been able to hold GNPAs at round 2% through the business cycles and expects to maintain this level going forward. The bank’s board has declared a dividend of Rs 15.90 per equity share for FY25.