State Bank of India (SBI) on Friday reported an 81 per cent Y-o-Y surge in net profit at Rs 4,189.34 crore for the quarter ended June 2020. Net Profit was Rs 2,312.20 crore in the same quarter last year. The profit came in much higher than Rs 4,000 crore estimate by the street.

The profit was lifted by one-time gains of Rs 1,539.73 crore on account of stake sale in arm SBI Life. In June this year, SBI sold 2.1 per cent equity stake in SBI Life Insurance Company via offer for sale route to comply with shareholding norms. SBI’s holding in the life insurance firm has fallen to 55.5 per cent from 57.60 per cent earlier.

Q1FY21 (in crores)Q1FY20 (in crores)Change
Net Profit4189.342312.20+81%
Net Interest Income2664124500+16%
Metric Comparison Y-o-Y
Net Profit (in crores)Net Interest Income (in crores)Net NPA
HDFC Bank6659156650.33%
Comparison b/w Largest Public and Private Bank

The state-run bank has made an additional provision of Rs 1,836 crore for COVID related accounts. With this, total provisions pertaining to COVID 19 stood at Rs 3,008 crore, as on June 30.

Indian lenders are bracing for a surge in bad loans in a pandemic affected economy, with the central bank’s relief measures including deferments of loan and interest payments as well as low-interest rates expected to hurt the health of banks.

Furthermore, Total Deposits grew at 15.96 per cent Y-o-Y, out of which Current Account Deposit grew by 12.98 per cent Y-o-Y. While Saving Bank Deposits grew by 17.29 per cent Y-o-Y.

In conclusion, SBI hopes to continue the growth in the retail and corporate sector, as showcased by strong earnings.

You can view the company’s press release here.