What are you making of the SBI numbers?
SBI has beaten the estimate by a fat margin and even on all parameters including NII income, it has recorded a very good set of numbers. Even gross NPA headline numbers look quite good. We need to look a little bit more into the slippages but given the DHFL recovery, these numbers are expected to be very good.
There is a strong good performance coming in on the gross NPA front also. There is a sharp reduction in provisions.
There was a change in accounting method under IRAC norm where RBI asked the banks to adjust the recovery from written off account under the provisioning line. It is not confirmed, but some part of this may be because of this and also because there is a recovery from DHFL account. Now it is coming under the provisioning line and because of that, we are seeing such a fall in provisioning in this quarter.
What are you seeing in terms of the loan provisioning?
Loan provisioning can be lower because of change in the IRAC norms because we expect credit costs to gradually come down for the bank. Asset quality of both the corporate and retail side have improved quite a lot in the last year. If we do not see any Covid third wave, then probably that part of the provisioning expenses is behind us.
