New Delhi: Beating market expectations, State Bank of India (SBI) posted its highest quarterly profit in about seven years on February 1. India’s largest lender recorded a net profit of Rs 3,955 crore for the third quarter that ended December against a net loss of Rs 2,416 crore a year ago. With asset quality improving, SBI, which accounts for more than a fifth of India’s banking assets, set aside lower provisions for bad loans.
Highest net profit since March 2012
In the quarter that ended December, SBI’s gross bad loans as a percentage of total loans eased to 8.71 percent from 9.95 percent in the previous quarter and 10.35 percent in the year-ago period. This end-December result is SBI’s highest quarterly profit since it registered a bottomline of Rs 4,050 crore in the March quarter of 2012.
SBI, in a stock exchange filing, said its provisions for bad loans in the current quarter declined 21.3 percent to Rs 13,971 crore from a year earlier. A write-back on provisions made for mark-to-market losses resulted in total provisions declining to 68.2 percent. Driven by healthy growth in loans, net interest income rose 21.4 percent to Rs 22,691 crore.
Helped by a slowdown in slippages, SBI’s gross bad loans eased from the previous quarter to Rs 1.88 trillion.