SBI surpasses Reliance Industries to become the most profitable firm in Q2

State Bank of India

State Bank of India has become the country’s most lucrative corporate, with consolidated net income of 14,752 crore in the second quarter of FY23, surpassing Reliance Industries’ net earnings of 13,656 crore.

On a standalone basis, the lender has surpassed the Mukesh Ambani firm, which has remained the most successful corporation for decades, by a greater margin, despite Reliance taking a 4,039 crore hit from windfall tax on its exports during the quarter.

Reliance’s net income includes 4,729 crore from Jio Platforms and 4,404 crore from the retail sector, both pre-tax earnings, which were somewhat lower than the previous year’s figure of 13,680 crore.

SBI chairman Dinesh Kumar Khara stated that if the bank had recorded treasury earnings during the quarter, net income would have been significantly higher. However, he did not specify by how much.

He stated that the bank has realised notional profits on its treasury investments, which have a 2.85-lakh-crore more exposure than the mandated 19 per cent in SLR or statutory liquidity ratio. All banks are required by the Reserve Bank to invest 19 per cent of their gross deposits in central government securities.

SBI’s consolidated net increased by 66% during the review period, from only 8,890 crore the previous year. The SBI group’s total income increased to 1,14,782 crore in the third quarter, up from 1,01,143.26 crore the previous year.

However, Reliance continues to be the most lucrative firm in the first half, with a net profit of 31,611 crore, compared to SBI’s 22,077 crore. Similarly, Reliance leads in terms of revenue, with 253,497 crore (traditionally, Indian Oil and ONGC are the greatest in terms of top-line), compared to SBI’s 1,14,782 crore for the period under review.

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When compared to others, particularly SBI’s peers, the most profitable and second largest lender, HDFC Bank, trails far behind with a net income of only 11,125 crore, up 22.3 percent in the quarter.

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