The State Bank of India (SBI) reported a 41.3% increase in net profit to £9,114 billion in the fourth quarter on a sharp improvement in asset quality in the three months ended March 31.
For the year, the state-run lender’s net profit increased by 55.2% to ₹31,676 crore.
“FY22 was an exceptional year,” Chairman Dinesh Khara said at a news conference. “It is encouraging that the bank has been able to deliver reasonably good results in terms of business, profitability and asset quality parameters,” he added.
“We have also created sufficient reserves for the restructured book to protect our balance sheet from future shocks,” added Mr. Khara. The return on equity at the end of the fiscal year was 13.92%, an improvement of 398 basis points year-on-year, and the bank is now targeting a return on equity of 15%, Mr. Khara said.
While the domestic net interest margin increased 29 basis points to 3.4% in the fourth quarter, net interest income for the period rose 15.3% from the year-ago period.
Gross advances for the quarter increased 11% to ₹28,18,671 crore and the retail loan portfolio exceeded ₹10,000 crore. Total deposits increased by 10.1%.
In FY22 the bank had a special reserve of ₹7,418 crore to accrue due to a change in family pension rules.
During the quarter, the bank’s loan loss provisions fell 67.1% to ₹3,262 crore. For FY22, provisions decreased 48.3% to ₹14,087 billion from 27,244 crore a year earlier.
In the fourth quarter, the bank’s gross non-performing assets (GNPA) declined 11.4% to ₹1,2,023 crore. Net NPA shrank 24% to 27,966 crore.
SBI said it made a provision of ₹7,900 crore.
The bank said its capital adequacy ratio was 13.83% at the end of the fourth quarter and its return on assets rose 19 basis points to 0.67%.
RBI’s recent hike in benchmark interest rates would not affect the bank’s asset quality or result in major stress, Mr. Khara assured.