The State Bank of India logged a 8 per cent jump in its net profit after tax on a year-on-year (YoY) basis in its second quarter (Q2) earnings on Saturday, revealed via an exchange filing. It recorded a net profit of Rs 14,330 crore for the September quarter in the current financial year (FY24) against a net profit of Rs 13,265 crore in the second quarter of the previous fiscal year (FY23). 


The lender witnessed a 12 per cent growth in its net interest income (NII) from Rs 35,183 crore in Q2FY23 to Rs 39,500 crore in Q2FY24. NII is a reflector of interest earned by the bank after measuring the difference between the interest borrowers pay to the bank and the interest paid by the bank to its depositors. 


The bank stated that it’s Gross Non-Performing Assets (GNPAs) improved and stood at 2.55 per cent, against 3.52 per cent for the same period a year earlier. The lender’s Net NPA stood at 0.64 per cent for the reporting quarter, down from 0.80 per cent on a year-on-year (YoY) basis. NPAs are loans or advances issued by the bank that are subject to late repayment or unlikely to be repaid by the borrower in full. 


The operating profit of the bank declined 8 per cent and stood at Rs 19,417 crore in the reporting quarter, against Rs 21,120 crore in the same period a year earlier. At the same time, the provision coverage ratio (PCR) of the lender declined 248 basis points to 75.45 per cent, from 77.93 per cent on a year-on-year (YoY) basis. 


The slippage ratio for the lender improved marginally to 0.70 per cent in the reporting quarter, from 0.86 per cent in the corresponding period a year earlier. The slippage ratio represents the rate at which a good loan becomes bad. A sharp increase in slippage affects the banks’ provisioning and net profit, while a low or no slippage is indicative of the bank’s good asset qualities.


The bank recorded a credit growth of 12.39 per cent on a YoY basis, where domestic advances logged an increase of 13.21 per cent. The boost in domestic advances was attributed to the growth in SME advances which registered gains of 22.75 per cent, followed by retail personal advances, which jumped 15.68 per cent, both on a YoY basis. Agricultural and corporate loans recorded a growth of 14.76 per cent and 6.62 per cent respectively, both on a yearly basis.


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