State Bank of India’s second-quarter profit more than trebled beating estimates, aided by the sale of stake in its life insurance subsidiary. The country’s largest lender also reported an improvement in its asset quality, despite concerns of renewed weakness in corporate credit quality.
Credit Growth Modest
Domestic credit growth stood at 8.43 percent year-on-year, led by retail-personal loan advances. Corporate loan growth was muted at 2.7 percent, which, according to Kumar, is due to lower utilisation of working capital limits.
Deposit growth stood at 8 percent. Within this, savings bank deposits grew 7.42 percent. SBI is the only bank which has linked its savings deposit interest repo to an external benchmark.
The bank’s cost-to-income ratio improved to 53.47 percent from 55.96 percent over last year. Capital adequacy ratio improved to 13.59 percent as of September.
Shares of SBI rose as much as 5.5 percent, the most in over a month, after the earnings. The stock has fallen 8.5 percent this year so far, underperforming the Nifty Bank Index which has risen 7.3 percent and the Nifty 50 Index that’s up 6.6 percent.
Watch | SBI Chairman Rajnish Kumar discusses the bank’s performance in Q2
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