🔥 Premium AI-powered Stock Picks from InvestingPro Now up to 50% OffCLAIM SALE

SBI reports 9.1% rise in Q2 net profit despite higher operating expenses

EditorHari Govind
Published 2023/11/06, 09:26
© Reuters.
SBI
-

State Bank of India (SBI) posted a 9.1% increase in consolidated net profit for its fiscal second quarter, reaching INR161 billion ($1.94 billion). The bank's total income saw a significant boost, rising by 26% to INR1.443 trillion. Both standalone net interest and noninterest income also witnessed growth, increasing by 12% and 22% respectively.

Despite the positive income growth, SBI experienced an 8.1% decline in operating profit due to a surge in expenses. On a brighter note, total provisions, which include funds set aside for potential losses, saw a substantial reduction, dropping by 35% year-on-year and 40% quarter-on-quarter.

SBI highlighted strong bank credit growth and promising macroeconomic indicators in its report. The bank is forecasting a robust 6.5% GDP expansion, reflecting optimism about India's economic prospects.

However, SBI also cautioned about potential risks arising from sustained high interest rates that could impact capital flows to emerging markets such as India. This warning underscores the challenges that financial institutions may face amid global monetary tightening policies.

InvestingPro Insights

According to InvestingPro data, SBI has a market capitalization of $102.47M and a negative P/E ratio of -87.59. SBI's revenue over the last twelve months as of Q2 2023 was $6.17M, showing a growth of 5.67%. The quarterly revenue growth for Q2 2023 was 11.6%.

InvestingPro Tips highlight that SBI has seen accelerating revenue growth and consistently increasing earnings per share. This aligns with the reported 9.1% increase in consolidated net profit and the 26% rise in total income. However, the bank's poor earnings and cash flow may force dividend cuts, despite having raised its dividend for 3 consecutive years.

It's noteworthy that SBI, a prominent player in the Banks industry, trades at a low earnings multiple and generally experiences low price volatility. For potential investors, it's worth noting that the InvestingPro platform offers a plethora of additional tips that provide a comprehensive understanding of a company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.