SBI posts record profit on lower provisions, strong other income

State Bank of India (SBI) on Friday reported a record 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 India's largest lender, the June quarter profit beat the Bloomberg consensus estimate of ₹15,032 crore.

The substantial annual increase in other income was on a low base, a result of mark-to-market (MTM) loss in Q1 of FY23. Its net interest income— the 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 but 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%.

“NIM is always dynamic because the yield on advances will keep on changing and the cost of deposits will also keep on changing," said Dinesh Khara, chairman, SBI.