SBI Q2FY19 review: 5 key points to note in this result

The State Bank of India (SBI) in its September 2018 quarter has turned its losses into profit! SBI posted a net profit of Rs 944.87 crore in Q2FY19, which was against net losses of Rs 4,875.85 crore in Q1FY19. However, the Q2FY19 net profit was down by 40.26% as against profit of Rs 1,581.55 crore recorded in the corresponding period of previous year. Going ahead, net interest income (NII) came in at Rs 20,905.69 crore this quarter, which was up by 12.48% compared to Rs 18,585.90 crore a year ago same period. On the other hand, NII in Q2FY19 was below 4.09% as against NII of Rs 21,798.36 crore recorded in Q1FY19. 

Here's a list of 5 key things to note for SBI's result. 

Deposits growth! 

• Deposits of the whole bank grew by 7.02% YoY from Rs 26,23,180 Cr as on September 17 to Rs 28,07,420 Cr as on September 18
• Domestic Savings Bank Deposits grew by 8.55% YoY from Rs 9,69,833 Cr as on September 17 to Rs 10,52,728 Cr as on September 18
• Domestic Current Account Deposits grew by 6.05% YoY from Rs 1,64,149 Cr as on September 17 to Rs 1,74,076 Cr as on September 18
• Domestic CASA Deposits grew by 8.19% YoY from Rs 11,33,983 Cr as on September 17 to Rs 12,26,804 Cr as on September 18
• Domestic CASA ratio improved by 39 bps from 44.88% as on September 17 to 45.27% as on September 18
• Domestic Term Deposits grew by 6.47% YoY from Rs 13,92,980 Cr as on September 17 to Rs 14,83,097 Cr as on September 18

Loan growth! 

• Domestic Advances registered a growth of 11.11% from Rs 16,00,546 Cr as on September 17 to Rs 17,78,321 Cr as on September 18
• Retail Advances (including SME, Agri & Personal) grew by 8.91% YoY from Rs 9,48,479 Cr as on September 17 to Rs 10,33,022 Cr as on September 18
• Retail Personal loans grew by 14.23% YoY from Rs 5,04,777 Cr as on September 17 to Rs 5,76,594 Cr as on September 18. Home loans grew by 14.26% from Rs 3,14,775 Cr as on September 17 to Rs 3,59,651 Cr as on September 18. Auto loans and Express Credit increased by 8.27% and 32.79%  respectively during the same period
• SME Advances grew by 5.24% YoY from Rs 2,52,464 Cr as on September 17 to Rs 2,65,697 Cr as on September 18
• Corporate Advances grew by 14.30% YoY from Rs 6,52,067 Cr as on September 17 to Rs 7,45,299 Cr as on September 18

Asset Quality! 

• Gross NPAs declined from Rs 2,12,840 Cr as on June 18 to Rs 2,05,864 Cr as on September 18, whereas Net NPAs declined from Rs 99,236 Cr to Rs 94,810 Cr during the same period
• Gross NPA Ratio at 9.95% declined sequentially by 74 bps. Net NPA Ratio at 4.84% declined sequentially by 45 bps
• Provision Coverage Ratio improved by 655 bps YoY from 47.40% as on September 17 to 53.95% as on September 18 and improved by 57 bps sequentially
• Provision Coverage Ratio (Including AUCA) improved by 563 bps YoY from 65.11% as on September 17 to 70.74% as on September 18 and improved by 149 bps sequentially
• Provision Coverage Ratio on NCLT List 1 and List 2 are at 64% and 78% respectively

Key financial ratios! 

Average Cost of Deposits declined by 32 bps from 5.42% as on September 17 to 5.10% as on September 18 and by 1 bps sequentially from 5.11% as on June
18.

Average Yield on Advances declined marginally by 3 bps from 8.46% as on September 17 to 8.43% as on September 18. The Average Yield on Advances
declined by 14 bps from 8.57% as on June 18 to 8.43% as on September 18, on account of interest income booked on NCLT resolutions in Q1FY19. 

Net Interest Margin (Domestic) increased by 29 bps YoY from 2.59% as on September 17 to 2.88% as on September 18. However, it declined by 7 bps
sequentially due to interest income booked on NCLT resolutions in Q1FY19.

Digital performance! 

• Share of transactions through alternate channels increased by 502 bps YoY to reach 83.47% of the total transactions as on September 18 from 78.45% as on September 17.
• More than 20,000 SB accounts opened per day on YONO platform reaching a peak of more than 31 thousand accounts per day. More than 60,000 pre- approved Personal Loans worth Rs 500 Cr disbursed on YONO platform.
• Leadership position in Debit Card spends with market share of 30.3%

The share price of SBI soared by over 5% after the announcement of result. However, the bank finished at Rs 296.25 per piece up by Rs 10.80 or 3.78% on Sensex.