Stake sale in life insurance arm fetches Rs1540 cr
MUMBAI: The 56.92 per cent-government owned, State Bank of India (SBJ), the country’s largest lender, reported 81 per cent growth in its Q1 net profit to Rs4189 crore ($558 million) compared with Rs2312 crore the bank reported a year earlier.
The Rs1540 crore one-time gain received from selling a stake in its life insurance arm, SBI Life Insurance, has helped the bank earn a decent quarterly income this time.
The bank’s shares gained 2.41 per cent on Friday to close at Rs191.05 on NSE. SBI’s asset quality improved, with gross bad loans as a percentage of total loans falling to 5.44 per cent from 6.15 per cent in the previous quarter and 7.53 per cent for the comparable quarter last year.
The net NPA ratio declined from 3.07 per cent to 1.86 per cent during this period.
Even as the provisions for bad loans fell 19 per cent to Rs9420 crore billion, the provision coverage ratio (PCR) has improved to a healthy level of 86.32 per cent as of June 30, 2020.