New Delhi: India's largest public sector bank, State Bank of India (SBI), has registered a spectacular growth in its second quarter income of FY 2024-25. The bank reported a net profit of ₹ 18,331 crore, which is 28% higher than last year. A poll conducted by ET Now had estimated SBI 's profit to be around ₹ 15,550 crore, but the bank performed better by leaving this estimate far behind.
SBI's Net Interest Income (NII) grew 5% to ₹41,620 crores in this quarter from ₹39,500 crores in the same period last year. At the same time, the bank's operating profit before provision (PPOP) grew 51% to ₹29,294 crores, while it was ₹19,417 crores last year. These figures show the bank's financial position to be strong, although investors expected a faster growth in NII, but it was slightly less than the estimated growth. The reason for this was the increase in the cost of borrowing (cost of deposits) compared to the interest rate on loans (yield on advances).

The bank's Net Interest Margin (NIM) has also decreased. Domestic NIM fell 16 basis points to 3.27% in this quarter, while it was 3.43% last year. SBI's gross advances grew by 15% to ₹39.2 lakh crore, while deposits grew by only 9% to ₹51.17 lakh crore. Credit costs saw a 16 basis point increase and are now at 0.38%, compared to 0.22% last year. However, the capital adequacy ratio (CAR) remained strong and stood at 13.76%, while the CET-1 ratio was 9.95% and the Tier-1 ratio was 11.32%.

SBI shares fell nearly 3% to trade at ₹ 834.6 in response to the market. The stock opened at ₹ 859.60 today but fell to ₹ 834.20 during the day. Its capitalizationisation remains around ₹ 7.56 lakh crore. SBI has a P/E ratio of 11.14 which indicates relatively attractive valuations compared to other stocks in the sector. The bank has a dividend yield of 1.62%. The stock is still trading below its 52-week high of ₹ 912.00 which indicates some short-term pressure. The CDP score is B- which indicates a cautious stance while the 52-week low is ₹ 555.15 which indicates potential for an upside.