InvestorQ : How were the State Bank numbers for the Sep-20 quarter?
vaishnavi mhatre made post

How were the State Bank numbers for the Sep-20 quarter?

vidhya Laxmi answered.
6 months ago

State Bank of India reported a fantastic set of quarterly numbers on Wednesday 04 November 2020. For the Sep-20 quarter SBI reported 55% growth in profit to Rs.5246 crore on a consolidated basis, one of the best numbers in the last many years.

How did this net profit growth come about? This growth was driven by a surge in net interest income or NII as it is popularly known. While SBI managed to keep its interest costs under check, the interest income saw a surge in the post-COVID scenario.

Among the large heavyweight banks in the Nifty, SBI had been the only major bank left to announce numbers. That has come a lot better than expected. More importantly, SBI’s asset quality improved as well and even its loan loss provisions reduced during the month.

SBI appears to have challenges too. On the one hand its ROA is still very low by banking standards and that could be due to the large capital base. Secondly, the capital adequacy at 14% needs a lot of cushioning before SBI can expand its loan book in an aggressive way.