SBI shares gain on strong advances growth
The shares of the country’s largest bank, State Bank of India gained sharply after the bank reported its first-quarter numbers. The bank showed YoY growth based on key banking parameters such as advances and deposits.
The profit of the bank jumped as much as 60 per cent YoY for Q1FY21. The profit growth of the bank is Rs 1,539.73 crore, on account of sale of a certain portion of investment in its subsidiary, SBI Life Insurance Company Limited for the quarter ended June 30, 2020. Its consolidated deposits grew by 15 per cent YoY to Rs 34,53,116.46 crore. The total advances stood at Rs 23,47,478.45 crore, which increased from Rs 21,79,285.48 of the same quarter in the last fiscal year.
One of the very important points in the quarter was an improvement in the loan disbursements. Personal loan disbursement increased to 41 per cent during June 2020, which had declined to as low as 72 per cent in April 2020. The situation in the auto loan segment also improved to report a growth of 7 per cent in June, which had reduced to 99 per cent in April and 72 per cent in May.
The numbers show a very positive trend in the re-opening of the economy. Despite this, the bank added that the overall situation continues to be uncertain. One of the major challenges that the bank sees is the extended working capital cycle and waning cash flows.
Its shares are trading at Rs 191.50, up by 3 per cent on BSE.