SBI stock : Why State Bank of India net profit rises by 80%

Let's discuss SBI. We’ll discuss the implications of this outcome and whether it's important for an existing investor or one who is looking to speculate. We are going to discuss the Q4 results and compare it with the previous year, let's start by talking about SBI. banking concern of India which could be a Fortune 500 company was started in 1806 in Kolkata which implies its history is around 200 years and its headquarter is in Mumbai. And is that the largest and oldest of the general public sector banks. Currently, its share price is trading above 400 and has given returns of over 160% within the last one year. So let's now observe Q4FY21 and compare it with Q4FY20. Its interest income was 62,681 crore last year, which has now increased to 65,102 crore. Its disbursal was Rs 39,934 crore which has come all the way down to Rs 38,035 crore. Net interest income increased from 22000 crores to 27000 crores which may be a positive aspect. Its operating profit has increased from 18000 crores to 19,700 crores. Lucre has also increased from 3500 crores to 6400 crores. If we compare these figures with the previous quarter, its net interest income has come down from 28,820 crores to 27,067 crores.
Operating profit increased to Rs 19,700 crore from Rs 17,333 crore and net income of Rs 6500 crore is on top of the previous quarter. Important parameters like net interest margin came dead set be 2.09%, as compared to three.12% within the previous quarter and last year was 2.74%. Domestic NIM stands at 3.11%, up from 3.34% within the previous quarter, and up 2.94% last year. Profitability has grown over the half-moon and has given a decent performance from last year
Let us now compare the performance of the corporate on a yearly basis
NII for FY21 was 1,10,710 crores as against 98,085 crores in FY20
OP is 71,554 crores as compared to 68,133 crores in FY20
Total income increased from Rs.14,488 crore to Rs.20,410 crore
Net interest margin also increased from 2.97% to 3.04%
Let us now observe the capital ratios that were introduced in every country after the 2008 crisis and every one the regulators had to stay a check and mandate the capital adequacy ratio, which suggests they need to be covered under Tier 1 and a pair of bonds. Must reserve some money. So whenever you analyze a bank, you've got to check its CAR with compliance
So allow us to now discuss its CAR, the line tells you the minimum requirement in CET Tier 1 which is 7.975%. But the amount of the bank as on March 21 is 10.02%, which suggests there's lots in Tier 1, whereas if we glance at the minimum CAR, it has to be 11.47% while the bank has 13.74%. And it's increased over the years and it's a positive that they need maintained it above compliance
Now allow us to discuss the asset quality which is measured by Gross NPA and Net NPA. So let's examine their NPAs within the recent results, you may be ready to mark 2 columns of 20th September and 20th December with an asterisk. His Gross NPA as on 20th September was 5.28% and Net NPA was 1.59%. And as on December 20, the Gross NPA was 4.77% and also the Net NPA was 1.23%. The asterisk column represents the NPAs at the time when the SC ordered that banks don't seem to be required to report NPAs by 31 Aug 20. Hence because of which all the banks underreported their NPAs and what would have happened if the order wasn't there, the particular NPAs are shown within the column which was 5.88% and 2.08% respectively as on 20th September. And in 20th December, Gross NPA was at 5.44% and Net NPA was at 1.81% and if we compare it with 21st March, Gross NPA was 4.98% and Net NPA was 1.50%
Let us now discuss the spread of their NPAs in order that you'll be able to understand their business. Their major NPAs are from the agriculture sector at 15%, followed by corporates at 7.71% and SMEs at 7.67%. Net interest income witnessed a growth of 12% to 1.10 lakh crore this year. And net interest margin saw a rise of seven basis points, with operating profit seeing a rise of 5.02%. net also saw a jump of 40.88%. Now let's take a look at the key ratio first credit cost, which saw a decline of 75 basis points. Net NPAs fell 73 bps which may be a good point, with CAR at 13.74% which saw a jump of 68 bps. Total advances like record ratio saw a rise of 4.81%, deposits by 13.56% and retail personal advances by 16.47%.
Now we'll discuss CASA ratio, business works after you deposit your money in bank and bank gives you rate and bank lends your deposit amount at high rate of interest after their due diligence. These interest rates are a type of income for the bank called the web interest margin. Hence the bank bears very cheap cost in accounting and savings accounts, so whenever you analyze a bank, you've got to appear at its CASA ratio. Its CASA was 45.16% in March 2020 which has increased to 46.13% at the present. Obsevation also shows the amount of bank account which was 38.20 per cent and is now 38.38 per cent. Fixed deposits have come down from 54.84% to 53.87%. Current accounts see a jump from 6.96% to 7.75%
You see growth within the low-cost segment, but you furthermore might must see where the bank has shown growth. You’ll be able to see credit growth within the personal segment from 36.19% to 39.89%. Corporates saw a decrease from 40.87% to 37.52% which suggests not much growth.
(Warning: Please invest supported your research. the aim of this text is to share information only)