Result Analysis State Bank of India

Particulars (In Cr.) Q3FY21 Q2FY21 Q3FY20 QoQ % YoY%
Interest earned 66,734 66,814 67,692 -0.1% -1.4%
Interest Expended 37,915 38,633 39,913 -1.9% -5.0%
Net Interest Income 28,820 28,181 27,779 2.3% 3.7%
Operating Profit 17,333 16,460 18,223 5.3% -4.9%
Provisions 10342 10118 7253 2.2% 42.6%
Net Profit after tax 5196 4574 5583 13.6% -6.9%
Deposits 3535753 3470462 3111229 1.9% 13.6%
Advances 2456607 2383624 2301669 3.1% 6.7%
Slippages 237 2756 16525 -91.40% -98.57%
Ratios (%) Q3FY21 Q2FY21 Q3FY20 QoQ YoY
Gross NPA 4.77 5.28 6.94 (51) bps (217) bps
Net NPA 1.23 1.59 2.65 (36) bps (142) bps
Provision Coverage Ratio 90.21 88.19 81.73 202 bps 848 bps
Net Interest Margin 3.34 3.34 3.59 (25) bps
Capital Adequacy Ratio 14.50 14.72 13.73 (22) bps 77 bps
CASA Ratio 45.15 45.39 44.72 (24) bps 43 bps


Result Highlight:

  • Net Interest Income in Q3FY21 grew by 3.7% YoY to Rs. 28820 crores; NIM was 3.34%
  • Interest Income of Q3FY20 includes one-time recovery of Rs. 4039 Crores.
  • Excluding one-time interest income of Rs 4,039 crs and other income of Rs.452 crs in Q3FY20, NII grew at 21.40% YoY in Q3FY21 while Operating Profit grew by 26.23% YoY.
  • GNPA and NNPA declined to 4.77% and 1.23%, from 5.28% and 1.59%, respectively on QoQ basis
  • Proforma Gross NPA at 5.44% vs 5.88% in Q2FY21, Proforma Net NPA at 1.81% vs 2.08% in Q2FY21
  • Provision coverage ratio improved to 90.21% from 81.73% at December’20
  • Total Deposits grew at 13.64% YoY, out of which Current Account Deposit grew by 11.33% YoY, while Saving Bank Deposits grew by 15.99% YoY
  • Sharp Decline in fresh slippages at Rs 237 crore compared with Rs 16525 crore a year earlier.
  • Slippage ratio as on 31st Dec 2020 is at 1.27%  vs 1.73% in Q2FY21 (including proforma slippages).

Management commentary:

  • Credit growth for full year FY21E to be 7%
  • Of the total retail loans 41% come from digital
  • Credit cost may be much lower than 2%
  • Total restructuring requests of Rs 18100 Crore includes Rs 3800 from Retail loan (60% from home loans), there can be some addition as MSME window is open till March, however increase may not be substantial. Corporate restructuring includes one large account.
  • Retain guidance of Rs.60000 Cr. Slippages and restructuring for FY21
  • Do not expect to make additional Provisions on accounts to be transferred to proposed ARC.
  • Employee cost is expected to increase by 10bn on qtrly basis, there will be no need to any wage revision provision and Retiral benefit provision will depend on the yield.


SBI beats street estimates on all front. Collection efficiency of the bank in Q3FY21 in the Domestic loan book stands at 96.5%. The bank holds unutilized COVID provisions of Rs. 6200. Proforma PCR improved 200bp QoQ to 68%, with Corporate portfolio PCR improving to 89%. SBI is expected to come out of the COVID impact without much stress in its asset quality. The big positive for the bank is the delcine in fresh slippages in Q3FY21 declined to Rs. 237 Cr. compared with Rs 16525 crore a year earlier. Proforma NPAs of the bank also improved in Q3FY21. Strong asset quality performance and commentary on likely slippage and probable restructuring is a big positive surprise.  Given the bank’s focus to clean up and strong asset quality we expect the bank to do well in coming quarters too. Thus Investors can accumulate the stock between Rs.360 -Rs.380 for the target price of Rs.470 with 12 months’ time frame.


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