Mumbai: the State Bank of India (SBI) reported an 81 percent jump in net profit for the June ended quarter at Rs 4,189.34 crore when compared to Rs 2,312.20 crore in the same quarter last year.
The quarter includes an exceptional item, that is the net profit of Rs 1,367.27 crore from the sale of a certain portion of the lender’s investment in SBI Life Insurance Company, it said. SBI’s holding in the subsidiary has now been reduced to 55.50 percent from 57.60 percent.
Its net interest income (NII), that is the difference between interest earned and disbursed, was up 16 percent year-on-year for the quarter at Rs 26,641 crore.
The largest bank in India made lower provisions for the quarter at Rs 12,501.30 crore, which is 19 percent less than Rs 13,495.08 crore in the March quarter, but higher than Rs 9,182.94 crore in the same quarter last year.
Shares of SBI rose over 4% after the results were declared on Friday afternoon.
Speaking of the effect of the COVID-19 pandemic on its business, the public sector lender in a note said “the situation continues to be uncertain and SBI is evaluating the situation in an ongoing basis. Major challenges for SBI would arise from extended working capital cycle and waning cash flows. Despite these conditions, there would not be any significant impact on the liquidity and profitability of SBI.”
The bank made an additional provision of Rs 1,836 crore on account of COVID-19 during the first quarter of 2020-21. With this, its total provisions associated with the pandemic stood at Rs 3,008 crore as on 30 June 2020. Provision coverage ratio stood at 86.32 percent as of 30 June.
