SBI posts net profit of Rs 862 crore in FY19 on higher interest income, asset quality improves

State Bank of India, the country's largest lender, made a profit of Rs 862 crore in the financial year 2018-19 after reporting losses in the last two years, helped by higher net interest income and improvement in asset quality.

"The bank had posted net loss of Rs 6,547 crore in FY18 and Rs 1,805 crore in FY17," SBI said in a filing to the Bombay Stock Exchange.

The public sector lender's net interest income (NII), which is the difference between interest earned and interest expended, increased 18.03 per cent to Rs 88,349 crore in FY19 versus Rs 74,854 crore in the previous year.

SBI's operating profit (EBITDA) for FY19 dipped 6.85 per cent to Rs 55,436 as compared to Rs 59,551 crore in FY18. The bank's provisions and contingencies declined by 31. 82 per cent to Rs 54,574 crore from Rs 66,058 crore in the last year.

As on March 31, 2019, net interest margin (NIM) of SBI increased by 28 bps to 2.95 per cent from 2.65 per cent in FY18. Gross advances increased 11.96 per cent to Rs 22,93,454 crore in FY19 as compared to Rs 20,48,387 crore in the last fiscal.

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SBI's asset quality improved in FY19 with gross non-performing assets (NPAs) ratio - bad loans as a percentage of gross advances - declining to 7.53 per cent versus 10.91 per cent in the previous year. Net NPA also fell to 3.01 per cent as compared to 5.73 per cent in the corresponding period last year.

"The bank has made a provision of Rs 3,984 crore (total Rs 5,643.41 crore) for the year ended March 31, 20I9 towards arrears of wages due for revision with effective from November 1, 2017," the SBI said in the exchange filing.

On the quarterly basis, the bank reported a net profit of Rs 838 crore in March quarter, as compared to net loss of Rs 7,718 crore in the corresponding quarter last year.

Net Interest Income grew by 14.92 per cent year-on-year to Rs 22,954 crore in Q4FY19, helped by growth in domestic credit, improved spreads and lower slippages. As a result, the domestic net interest margins increased to 3.02 per cent during January-March quarter, the bank said.

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In March quarter, Gross NPA ratio stood at 7.53 per cent versus 10.91 per cent in Q4FY18, while Net NPA ratio was reported at 3.01 per cent against 5.73 per cent in the year ago quarter.

The bank's board has not declared any dividend for the financial year ended March 31, 2019.

Meanwhile, SBI shares were trading at Rs 304.80 apiece, up 1.85 per cent, over its previous close on the BSE.

Edited by Chitranjan Kumar