State Bank posts record profit on lower provisions

India's largest lender State Bank of India (SBI) on Friday reported a net profit of ₹16,884 crore for the three months through June, more than double of last year, led by a surge in other income and lower provisions to cover bad loans.

- Shayan Ghosh

For the state-owned bank, the June quarter profit was its highest ever, beating the Bloomberg estimate of ₹15,032 crore.

The substantial annual increase in other income was on a low base, a result of mark-tomarket (MTM) loss in Q1 of FY23. Its net interest incomethe difference between interest earned and expended-rose 25% to ₹38,905 crore.

The bank's domestic net interest margin (NIM), a key indicator of profitability, however, contracted 37 basis points (bps) sequentially showed an improvement of 24 bps from the previous year to 3.47%.

Like its peers, SBI is also seeing the impact of its deposits repricing, an effect that kicks in with a lag. The bank's cost of domestic deposits increased 56 bps sequentially to 4.55%.