India's Largest Lender, SBI is India’s Second-most Profitable Business

State Bank of India (SBI), the largest lender in the nation, saw its earnings increase by 41 percent over the previous three years, making it the second-most profitable company behind Reliance Industries in FY23. As a result of higher net interest revenue and lesser provisions, the state-owned institution on Thursday announced a 57 percent year-over-year (y-o-y) increase in net profit to Rs 55,648 crore for the fiscal 2022–2023 period.

Has any other business achieved a profit like SBI?

Interestingly, other than Reliance Industries, no other Indian business has ever achieved a profit of more than Rs 50,000 crore. The third most profitable company, HDFC Bank, made a net profit of Rs 45,997 crore for the fiscal year that ended in March, while the most prominent company, Reliance Industries, declared a net profit of Rs 66,702 crore.

On the other hand, Bloomberg consensus estimates predict that ONGC, due to release its Q4 results on 29 May, would have a net profit of roughly Rs 48,000 crore.

Bank's credit growth has been strong across all segments.

Dinesh Kumar Khara, the chairman of SBI, commented on the results and noted that the bank's credit growth has been strong across all segments. Our international operations have maintained strong performance, and asset quality has improved. The gross NPA ratio is at its lowest point in the last ten years, Khara continued. At the end of March 2023, the bank's gross NPA ratio was 2.78 percent instead of 3.14 percent a quarter earlier.

RIL has maintained its top spot since FY16

RIL has maintained its top spot since FY16. However, according to Bloomberg data, TCS, HDFC Bank, SBI, ONGC, and IOC have alternated over the past many years for the following three positions in terms of profitability.

SBI's rise in the Stock Exchange

Since 2021, State Bank of India stock has experienced an incredible rise on the stock exchanges. Compared to the benchmark Nifty50 throughout the same period, the SBI stock has increased by more than twice its original value.

Like many of its competitors in the banking industry, SBI also stated that loans grew more quickly than deposits. SBI's loan book increased by 15.99% YoY to 32.69 lakh crore in Q4, while deposits increased by 9.19% YoY to 44.24 lakh crore, a far slower rate. The bank's cost of deposits climbed by 16 basis points YoY to 3.99% due to rising interest rates. For the fourth quarter in a row, deposit fees have climbed.

Retail loan growth exceeded corporate loan growth in Q4 with a YoY increase of 17.64% to 11.79 lakh crore compared to 12.52% for corporate loan growth to 9.8 lakh crore. Home loans increased by 14.07% to $6.41 lakh crore.