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SBI Reports A Surprising Profit After 3 Quarterly Losses

Olga Robert

The State Bank of India (SBI) reported a 40 percent fall in net profit with improved asset quality for the second quarter of the current financial year at Rs 944.9 crore from Rs 1,581.55 crore during the same period last year. In the previous quarter, the lender made a quarterly loss of Rs 4,875.85 crore. Analysts were expecting another loss this quarter.

The unexpected profit was a result of a one-time gain of Rs 1,087.4 crore from the sale of its investments in general insurance and merchant banking businesses and lower provisions for bad loans. The bank would have been reporting its fourth straight quarterly loss if it wasn't for the one-time gain.

The state-owned lender's net interest income (NII) was up by 12 percent on a year-on-year basis to Rs 20,905 crore. Its normalized net interest margins grew wider to 2.76 percent from 2.67 percent.

SBI's asset quality improved during the period under review as gross non-performing assets (NPAs) were at 9.95 percent compared with to 10.69 percent in the first quarter. Net NPAs were at 4.84 percent as against 5.29 percent.

Shares of SBI rose over 5 percent after the results were announced.

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