State Bank of India (SBI), the banking behemoth, released its quarterly results for the third quarter of the fiscal year 2024. Despite a marginal decline in net profit, the bank demonstrated resilience with robust numbers across various segments. Let’s delve into the key highlights and insights from SBI’s Q3 FY24 performance.
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Profitability Amidst Decline: SBI reported a standalone net profit of ₹9,164 crore for the third quarter of FY24, marking a decline of 35% compared to the preceding quarter. This dip was attributed to higher operating expenses incurred during the period, as detailed in the stock exchange filing. However, it’s noteworthy that the bank’s net profit for the first nine months of FY24 stood at ₹40,378 crore, reflecting a substantial 20.40% increase over the same period in the previous fiscal year.
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Segment-wise Growth: SBI exhibited a commendable growth trajectory across its segments. Corporate advances surpassed ₹10 trillion, while SME advances crossed ₹4 trillion, indicating a notable expansion in both sectors. The bank witnessed an overall growth of approximately 14.38% year-on-year (YoY) across all segments.
Financial Indicators: Key financial indicators portrayed a positive outlook for SBI. Return on Assets (ROA) for the first nine months of FY24 increased by 0.94%, up by 7 basis points (bps) from the same period in the previous fiscal year. Return on Equity (ROE) also improved to 19.47%, reflecting an 88 bps enhancement over the corresponding period.
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Asset Quality Improvement: Gross Non-Performing Assets (NPA) stood at 2.42%, showcasing a reduction of 72 bps compared to the previous year. Similarly, Net NPA witnessed an improvement, declining by 13 bps year-on-year. The Provision Coverage Ratio (PCR) reached 74.17%, further bolstering the bank’s asset quality.
Expectations vs. Reality: Analysts had anticipated a decline in SBI’s net profit for Q3 FY24, a sentiment echoed by Shreyansh Shah, Research Analyst at StoxBox. However, despite the projected dip in Net Interest Margins (NIMs) due to high funding costs, SBI’s profitability remained robust, buoyed by elevated advances disbursals and other income growth.
Upcoming Conference Call: Following the declaration of SBI’s Q3 results, a conference call is scheduled for Saturday at 5:00 PM. Investors and stakeholders await further insights and clarifications regarding the bank’s performance and future strategies.
Conclusion: State Bank of India’s Q3 FY24 results reflect a mixed bag of profitability amidst a marginal decline. Despite the challenges posed by higher operating expenses, the bank’s overall performance remains resilient, underpinned by strong segmental growth and improving asset quality. The upcoming conference call presents an opportunity for deeper engagement and analysis, shedding light on SBI’s trajectory in the evolving financial landscape.