India’s SBI sees loan growth remain strong after record profit
MUMBAI, November 5 (Reuters) – State Bank of India (SBI) (SBI.NS)the country’s largest lender, expects credit growth to remain in double digits while stepping up efforts to attract more deposits, where it expects growth in line with the industry.
The bank reported a 74% increase in quarterly net profit on Saturday, driven by higher loan growth and improving asset quality.
Net profit hit a record 132.64 billion Indian rupees ($1.62 billion) in June-September, beating analysts’ forecast of 105.30 billion rupees, according to Refinitiv IBES data.
Net interest income, the difference between interest earned and interest paid, rose 13% to 351.82 billion rupees.
Advances increased by 18.15%, while deposits increased by 9.99%.
“We should have credit growth of 14-16% in the current fiscal year,” President Dinesh Kumar Khara said at a press briefing.
“Now we also have cash investments, which we plan to unwind. That is why we are confident to support credit growth,” he said, adding that there was an improvement in the capacity utilization and that operations were back to pre-pandemic levels.
The bank has a term loan pipeline of Rs 2.4 trillion as it sees demand coming from sectors such as infrastructure, renewable energy and services.
And, while the bank did not give a growth target for deposits, Khara said SBI would not lag behind the industry.
Indian banks saw a 17.95% year-on-year jump in credit growth in the fortnight from Oct. 7, according to central bank data, and market participants expect an acceleration in credit growth. growth in the coming months. Deposit growth was 9.63% during this period.
SBI’s core net interest margin (NIM), a key indicator of profitability, improved to 3.55% from 3.50% a year earlier. It expects to maintain national NIMs at current levels.
The quality of the lender’s assets also improved, with gross non-performing assets (NPA) falling to 3.52% from 3.91% in the previous three months. Net NPA also improved, falling 20 basis points.
Total provisions fell to 30.39 billion rupees in June-September from 43.92 billion rupees in the previous quarter.
The bank’s capital adequacy ratio stood at 13.51%, down from 13.35% a year earlier.
($1 = 81.9620 Indian rupees)
Reporting by Nupur Anand in Mumbai and Neha Arora in New Delhi; Editing by Mark Potter
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