MUMBAI: State Bank of India reported a 1 per cent increase in its Q1 FY25
net profit
to Rs 17,035 crore from Rs 16,884 crore in the corresponding quarter last year. However,
profits
were almost flat due to a reduction in
interest margins
and a 70 per cent jump in
provisions
for bad loans.
The net profit of the country’s largest bank is higher than that of Reliance Industries which totalled Rs 15138 crore.
This marks the second consecutive quarter in which
SBI
has outperformed RIL, a company that has long held the title of the most profitable in the country.
“In the last four years, SBI has generated a total net profit of over Rs 1.6 lakh crore which is more than the net profit made in the previous 60 years,” said Dinesh Khara, chairman, SBI. Khara, whose term ends soon, added that he hoped to see SBI generate annual profits of Rs 1 lakh crore
At the end of the first quarter, SBI’s
deposits
increased by 8.2% year-on-year to Rs 49 lakh crore. However, this was marginally lower than the Rs 49.2 lakh crore reported at the end of March 2024. The bank’s
advances
at the end of the quarter grew by 15.4% year-on-year to Rs 38 lakh crore, which is a 1.2% increase compared to March 2024.
“We raised deposits when other banks were not looking at deposits and we deployed the funds in investments. These investments are giving us headroom to grow our credit. On deposits, we are making an optimum choice not to raise funds at any cost and simultaneously take care of depositor interest. As a result, while our cost of deposits has gone up by 45 basis points, the impact on our NIM is much lower,” said Dinesh Khara, chairman of the State Bank of India.
The chariman of the country’s largest bank said that the current phase of deposits outpacing credit was temporary. “We have seen that when alternative options are available, people have gone to markets but bank deposits remain the channeling source. We had a similar situation in 2007 when loans outpaced deposits, but it was a temporary phenomenon which we should be able to navigate with our investment book,” Khara said.
