India’s largest lender by assets reported a 14% rise in net profit and record net interest income, while treasury and foreign exchange losses weighed on other income.
State Bank of India has posted another strong quarterly set of results, with profit and core lending income rising in double digits for the July-to-September period and both figures reaching record levels. The country’s biggest lender by assets reported net profit of Rs 23,038 crore, up more than 14% from a year earlier, while net interest income climbed nearly 15% to Rs 49,143 crore, helped by robust credit expansion and a slight improvement in lending margins.
The bank’s performance was broadly ahead of market expectations, but the results also showed pressure in non-core income. State Bank of India said treasury losses linked to higher bond yields dragged on other income, even after it sold a stake in SBI Funds Management during the quarter. Deputy Managing Director of Finance Anindya Paul said the mark-to-market hit and foreign exchange losses amounted to close to Rs 1,300 crore, compared with a gain of about Rs 2,900 crore in the same quarter a year earlier. Operating profit rose more slowly than net profit, which helps explain why the shares finished lower after initially trading higher.
Credit growth remained the main engine of the quarter. Loans grew by nearly 18% year on year, while deposits rose by more than 12%, keeping the balance sheet expansion broad-based. The bank reiterated its loan-growth target of 14% to 15%, although management said the quarter was boosted by roughly $10 billion raised through the FCNR-B window, which was open until the end of August. Chairperson C S Setty said the bank remained upbeat about India’s medium-term growth outlook and added that the challenge for lenders was to support expansion while remaining disciplined on liquidity, funding, risk and capital.
Margins also improved, with net interest margin rising three basis points to 3.11%, above the bank’s own goal of staying above 3%. Asset quality continued to strengthen as gross and net bad-loan ratios fell further. Setty said there had been no shortage of funding for technology and digital systems when asked about cybersecurity spending, after the bank faced a reported data exposure last month. He said the root-cause review was still under way, but that SBI had already carried out containment steps, vulnerability checks and a wider cybersecurity drill focused on application programming interfaces. He also said the issue reinforced the need for stronger defences as digital banking expands the attack surface across the financial system.
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