State Bank of India has become the first lender of India to declare a net profit of more than £5 billion. The public sector bank has also surpassed HDFC Bank, which for a while was the most successful lender in India.
SBI reported a net profit of £1.67 billion for the March quarter, an increase of 83% over £911.4 million in the year-ago period. The bank’s net profit for FY23 stood at £5.02 billion, a rise of 59% over £3.16 billion recorded in the previous year. HDFC Bank had reported a net profit of £4.41 billion for FY23, an increase of 19% over £3.69 billion in FY22.
As both the loan book and average interest rates on loans increased concurrently in the fourth quarter, the profit margin widened to 3. 84%. Since the bank continued to have excess liquidity on its books, there was less of a need for it to solicit deposits.
SBI has declared a dividend of Rs 11. 3 per share up from Rs 7. 1 in the previous year. SBI chairman Dinesh Khara said that the bank had to make lesser provisions because of improved asset quality. This was reflected in the drop in non-performing assets to 2. 78% - the lowest in over a decade. Khara said the bank was taking all steps to ensure that it maintains the quality of its loan book in a sustainable way.