Result Analysis: State Bank of India Result Update Q2FY22
Particulars (In Rs. Cr.) Q2FY22 Q1FY22 Q2FY21 YoY% QoQ %
Interest earned 69,481 65,564 66,814 4.0% 6.0%
Interest Expended 38,298 37,926 38,633 -0.9% 1.0%
Net Interest Income 31,183 27,638 28,182 10.7% 12.8%
Operating Profit 18,079 18,975 16,460 9.8% -4.7%
Loan Loss Provisions 2,699 5,030 5619 -52.0% -46.3%
Net Profit after tax 7627 6504 4574 66.7% 17.3%
Total Deposits 3809630 3720987 3470462 9.8% 2.4%
Total Advances 2530777 2523793 2383624 6.2% 0.3%
Fresh Slippages 4,176 15,666 2,756 51.5% -73.3%
Ratios (%) Q2FY22 Q1FY22 Q2FY21 YoY (bps) QoQ (bps)
Gross NPA 4.9 5.32 5.28 -38 -42
Net NPA 1.52 1.77 1.59 -7 -25
Provision Coverage Ratio 87.68 85.93 88.19 -51 175
Net Interest Margin 3.5 3.15 3.34 16 35
Capital Adequacy Ratio 13.35 13.66 14.72 -137 -31
CASA Ratio 46.24 45.97 45.39 85 27
Slippages Ratio 0.66 2.47 0.53 13 -181

  Result Highlight: 

  • SBI Net Interest Income in Q2FY22 grew by 10.7% YoY to Rs. 31183 crores which was above the estimates of Rs. 28751 Crore.

  • Net Profit was highest ever, grew by 66.7% YoY at Rs. 7627 Crore despite of exceptional item of fully provided Rs 7,418 crores due to change in family pension rules, even as regulator granted dispensation to amortise in 5 years.

  • GNPA and NNPA declined to 4.90% and 1.52%, from 5.32% and 1.77%, respectively on QoQ basis

  • Provision coverage ratio improved to 87.68% from 85.93% at June’21

  • Total Deposits grew at 9.8% YoY, out of which Current Account Deposit grew by 19.70% YoY, while Saving Bank Deposits grew by 10.55% YoY.

  • Total domestic Advances grew 5.8% YoY in Q1FY22, Home loan, which constitutes 23% of Bank’s domestic advances, has grown by 10.98% YoY.

  • Slippages Ratio for Q2FY22 has declined to 0.66% from 2.4% in Q1FY22.

  • Cost to Income Ratio at 54.10% during Q2FY22 is lower by 106 bps YoY.

  • Return on Assets (RoA) increased by 18 bps YoY to 0.61% in Q2FY22 against 0.57% in Q1FY22.

  • Capital Adequacy Ratio (CAR) has declined by 31 bps QoQ to 13.35% as on Jun 2021. Adjusted for H1FY22 Profit, CAR would increase by 61 bps to 13.96%

  • Restructured Loan of worth Rs. 30,312 Crore under One Time Restructuring 1.0 and 2.0. which represent 1.2% of loan book.

Management Commentary: Chairman – Dinesh Khara

Credit Growth:

  • On Corporate Loan side we saw a degrowth of 3.9% YoY due deleveraging by corporates.

  • Credit growth will be the function of economy and we hopeful to achieve 10% growth

  • Expected credit growth in Steel, Iron and Oil companies. All metal sectors see up stick and capacity addition in expected.

  • Retain Loan growth which was 15.17% YoY in Q2 will continue to grow at faster rate and for corporate we decent demand this month and if this trend continue, we should see decent growth. Rs. 460000 loans are already sanctioned.

  • Have concern in home loan which we could pull back, In SME there had also some concern but had repercussion to pull back or restructure as per the revised guidelines and accounts which are restructured started performing well

Asset Quality:

  • In Q1 we had slippages on retail segment and we were able to pull back them, which is the reason for much lower slippages and also on account of improved Collection efficiency which stands at 95%

  • There no major concern related to asset quality as Underwriting has improved significantly and collection machinery has activated very well on ground level, our collection calls went multifold to 10X

  • Have made 100% Provision for SREI group, 30 accounts with Rs. 22000 Cr. Outstanding identified for transfer to NARCL over time

  • Have some old provision for telecom but no new provision. Had about Rs. 4000 Crore of write back on account of DHFL

  • We bought Gross NPA below 5 and Net NPA below 1.7. Going forward we should be in position of improving of asset quality


  • Raised Rs. 6000 AT -1 Bonds in October including this Capital Adequacy ratio would be 14.2%. Capital will not be the constrained for bank.

  • Our subsidiaries have leadership in their respecting segment and we will continue to nurture these subsidiaries Will consider listing General Insurance Business in 2- 3 Years.


SBI Reported strong growth in Net Interest Income and Net Profit. Loan growth of the banks was above the Estimates of 5%-6%. It managed its asset quality well with improved Gross and Net NPAs on YoY as well as on QoQ basis and slippages ratio at just 0.66%. Bank has seen a decent pull back or recoveries of Rs. 7407 Crore in Q2. It is Well provided for Stressed Book with PCR at 87.68%. Given the bank’s strong guidance for credit growth at 10% we expect it will do well in coming quarters on corporate side too. Considering strong numbers from bank and positive commentary from the management we recommend to buy the stock. Thus, Investors can buy the stock at CMP of Rs. 531 for the target price of Rs.640 with 12 months’ time frame.

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