SBI Q1 Results: Slippages rise from March, while margins come under pressure

India’s largest lender, State Bank of India Ltd. reported results for the June quarter on Friday, August 8, which were higher on a year-on-year basis on the profitability front, but its core income was below expectations.SBI reported a net profit of ₹19,160 crore, which is 15% higher than the same quarter last year, and also higher than the CNBC-TV18 poll estimate of ₹16,664 crore.

However, the profitability of the lender was aided by a higher other income component. Other income for the quarter increased to ₹17,345 crore from ₹11,162 crore last year.

Net Interest Income (NII) or core income for the quarter remained flat at ₹41,072.4, which is nearly the same as the previous year’s figure of ₹41,126 crore, and marginally below the CNBC-TV18 poll figure of ₹41,650 crore.Asset quality for the quarter remained stable. Gross NPA at the end of the June quarter stood at 1.83% from 1.82% last quarter, while Net NPA remained unchanged from the March quarter at 0.47%.

Fresh slippages for the quarter stood at ₹7,945 crore from ₹4,222 crore in he previous quarter.Recovery and upgrades during the quarter stood at ₹3,253 crore, higher than the ₹1,739 crore last quarter.

Wholesale ban advances were up 11.6% from last year, while domestic advances were up 11% on a year-on-year basis.

Wholesale bank deposits increased by 11.7% from last year, while CASA deposits were up 8% from last year.

Net Interest Margin (NIMs) for the quarter declined by 33 basis points from the same quarter last year to 3.02% from 3.35% and 3.15% in the March quarter.

Shares of SBI fell to the day’s low after the earnings announcement and are currently trading 1.2% lower at ₹795.35.