State Bank of India (SBI) is poised to report a robust set of Q2FY25 results, driven by solid loan and deposit growth. The country’s largest state-run lender will announce its performance for the July-September quarter on November 8, 2024. Analysts are anticipating a year-on-year (YoY) surge in both net profit and net interest income (NII), though sequential pressure on net interest margins (NIM) is expected.
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SBI Share Q2 Results
| Category | Q2FY25 Results |
|---|---|
| Net Profit | ₹18,331 crore |
| Operating Profit | ₹29,294 crore |
| Return on Assets (ROA) | 1.17% |
| Return on Equity (ROE) | 21.78% |
| Net Interest Income (NII) | +5.37% YoY growth |
| Net Interest Margin (NIM) | 3.14% (Whole Bank), 3.27% (Domestic) |
| Credit Growth | 14.93% YoY |
| Domestic Advances Growth | 15.55% YoY |
| Corporate Advances Growth | 18.35% YoY |
| Agri Advances Growth | 17.67% YoY |
| SME Advances Growth | 17.36% YoY |
| Retail Personal Advances Growth | 12.32% YoY |
| Deposits Growth | 9.13% YoY |
| CASA Deposit Growth | 4.24% YoY |
| CASA Ratio | 40.03% (as of 30th Sept 2024) |
| Gross NPA Ratio | 2.13% |
| Net NPA Ratio | 0.53% |
| Provision Coverage Ratio (PCR) | 92.21% (including AUCA) |
| PCR (Stand-alone) | 75.66% |
| Slippage Ratio (Q2FY25) | 0.51% |
| Slippage Ratio (H1FY25) | 0.68% |
| Credit Cost | 0.38% |
| Capital Adequacy Ratio (CAR) | 13.76% |
| Digital Acquisition (SB accounts) | 61% via YONO |
| Share of Transactions via Alternate Channels | 98.2% in H1FY25 |
State Bank of India (SBI) has reported an impressive set of financial results for the second quarter of FY25 (Q2FY25), marking continued growth across key metrics. The bank’s profitability, balance sheet strength, and asset quality have all shown significant improvement, reflecting its ongoing focus on sustainable growth and operational efficiency.
Key Financial Highlights
- Net Profit: SBI posted a net profit of ₹18,331 crore for Q2FY25, a notable increase of 27.92% compared to the same period last year, highlighting the bank’s strong earnings trajectory.
- Operating Profit: The operating profit for Q2FY25 surged by 50.87% YoY, reaching ₹29,294 crore. This sharp growth underscores the bank’s robust operational performance and cost management strategies.
- Return on Assets (ROA): The bank’s ROA for the first half of FY25 stands at 1.13%, while it rose to 1.17% for Q2FY25, reflecting a solid 16 basis points improvement YoY.
- Return on Equity (ROE): The ROE for the first half of FY25 stands at an impressive 21.78%, demonstrating the bank’s efficient use of shareholder equity.
Net Interest Income (NII) and Margins
- Net Interest Income (NII): NII for Q2FY25 increased by 5.37% YoY, driven by strong credit growth and stable interest margins.
- Net Interest Margin (NIM): The bank’s NIM for Q2FY25 stands at 3.14% at the whole bank level, with domestic NIM slightly higher at 3.27%. For the half-year period, the whole bank NIM is 3.18%, and domestic NIM is 3.31%, reflecting a healthy margin performance.
Balance Sheet Growth
- Credit Growth: SBI’s credit growth remained robust, with total credit rising by 14.93% YoY. Domestic advances grew by 15.55% YoY, driven by strong performance in corporate, agricultural, SME, and retail personal loans. Corporate advances led the charge with an 18.35% YoY growth, followed by Agri advances (17.67% YoY), SME advances (17.36% YoY), and retail personal advances (12.32% YoY).
- Deposits: Total deposits for Q2FY25 grew by 9.13% YoY, with CASA (Current and Savings Accounts) deposits increasing by 4.24%. The CASA ratio as of September 30, 2024, stands at a healthy 40.03%.
Asset Quality
- Gross NPA Ratio: SBI’s Gross Non-Performing Assets (NPA) ratio improved by 42 basis points YoY, reaching 2.13% in Q2FY25, reflecting better asset quality management.
- Net NPA Ratio: The Net NPA ratio improved by 11 basis points YoY to 0.53%, indicating that the bank is maintaining good control over bad loans.
- Provision Coverage Ratio (PCR): The PCR (including AUCA) improved by 28 basis points YoY, standing at 92.21%, while the standalone PCR stood at 75.66%, reflecting the bank’s strong provisioning against potential asset quality stress.
- Slippage Ratio: The slippage ratio for H1FY25 improved by 2 basis points YoY to 0.68%, while the Q2FY25 slippage ratio increased marginally by 5 basis points YoY to 0.51%. This indicates that the bank continues to manage its credit risk prudently.
- Credit Cost: The credit cost for Q2FY25 was 0.38%, which remains within a healthy range, further demonstrating the bank’s ability to manage credit risk effectively.
Capital Adequacy and Digital Growth
- Capital Adequacy Ratio (CAR): As of Q2FY25, SBI’s CAR stands at 13.76%, comfortably above regulatory requirements, ensuring the bank is well-capitalized to support future growth.
- Digital Transformation: SBI continues to lead in digital banking. A significant 61% of savings bank accounts were acquired digitally through its YONO platform, reflecting the bank’s success in digitizing its services. Furthermore, the share of transactions through alternate channels increased from 97.7% in H1FY24 to 98.2% in H1FY25.
Conclusion
SBI’s Q2FY25 results demonstrate robust performance across all key metrics, including strong profitability, healthy credit growth, and improved asset quality. The bank’s strategic focus on expanding its digital footprint, managing credit risk, and maintaining a strong capital base positions it well for continued success in the coming quarters. With a solid balance sheet, a strong capital adequacy ratio, and a commitment to digital banking, SBI is well-placed to continue its leadership in India’s banking sector.