SBI Q3 financial report: SBI's third-quarter financial report reveals a 35% drop in net profit, amounting to ₹9,164 crore.

SBI Q3 financial report: During the initial nine months of the financial year 2024, the bank recorded a profit of ₹40,378 crore, reflecting a notable 20.40% growth in comparison to the corresponding period in the preceding fiscal year, which posted a profit of ₹33,538 crore.

On February 3, the State Bank of India (SBI) disclosed a standalone net profit of ₹9,164 crore for the third quarter, marking a 35% decrease in the December quarter, according to a filing with the stock exchange. The bank attributed the decline in net profit for the October-December period to elevated operating expenses.

Achievements and Results

During the initial nine months of the financial year 2024, the bank recorded a profit of ₹40,378 crore. This represents a substantial 20.40% growth when compared to the corresponding period in the preceding fiscal year, which reported a profit of ₹33,538 crore.

The bank witnessed a growth of approximately 14.38% year-on-year (YoY) across all its segments. Notably, corporate advances exceeded ₹10 trillion, and SME advances surpassed ₹4 trillion, showcasing expansion in both sectors.

In terms of financial indicators, the Return on Assets (ROA) for the first nine months of FY24 experienced a 0.94% increase, rising by 7 basis points (bps) compared to the same period in FY23. Additionally, the Return on Equity (ROE) stood at 19.47% for 9MFY24, displaying an 88 bps improvement over the corresponding period in the preceding fiscal year.

There were positive developments in asset quality metrics as well. Gross Non-Performing Assets (NPA) showed improvement, standing at 2.42%, reflecting a reduction of 72 bps compared to the previous year. Net NPA also improved, reaching 0.64%, down by 13 bps YoY. The Credit Cost for 9MFY24 was reported at 0.25%, indicating a 12 bps improvement from the same period in the previous fiscal year.

The Provision Coverage Ratio (PCR) achieved a level of 74.17%, and when factoring in the Additional Unsecured Credit Amount (AUCA), it reached 91.49%. Additionally, total non-Non-Performing Asset (NPA) provisions, not encompassed in the PCR, totaled ₹33,472 crore, accounting for roughly 149% of Net NPAs at the conclusion of Q3FY24.

A significant portion of the advances business, amounting to approximately ₹95,142 crore, was secured through Analytical leads, showcasing a substantial 37% year-on-year (YoY) growth.

Anticipated Outcomes

As predicted by analysts, the decline in the bank's performance was in line with expectations. Shreyansh Shah, a Research Analyst at StoxBox, expressed optimism about State Bank of India's Q3FY24 results. While a slight decrease in Net Interest Margins (NIMs) was anticipated due to the persistently high cost of funds, Shah foresees the bank's overall profitability to experience substantial double-digit growth in the current quarter. This growth is attributed to increased loan disbursements supported by heightened infrastructure spending. Additionally, the bank's significant presence in salary accounts, along with a stable Current Account Savings Account (CASA) and Certificate of Deposit (CD) ratio, is expected to remain reassuring. The standout feature of this quarter's performance is anticipated to be the noteworthy expansion in other income, driven by the bank's strategic focus on leveraging its extensive branch network of 22,405 for cross-selling opportunities.

Following the announcement of SBI's Q3 results for 2024, there is a conference call scheduled for 5:00 PM on Saturday.