On Friday, the State Bank of India beat the expectations and posted its highest quarterly profit in nearly seven years. SBI became the country biggest lender by assets set aside lower provisions for bad loans and asset quality improved. According to a data, SBI net profit was 39.55 billion rupees ($556 million) for the third quarter ended Dec. 31, versus a loss of 24.16 billion rupees a year ago, and also analysts’ expectations for a profit of 32.08 billion rupees.
This is the bank biggest quarterly profit since it reported a bottom-line of 40.50 billion rupees in the March quarter of 2012. In the current quarter, SBI provisions for bad loans dropped by 21.3 percent to 139.71 billion rupees since last year, the bank said in a stock exchange filing. A write-back on provisions made for mark-to-market losses helped total provisions drop 68.2 percent. Net interest income grew 21.4 percent to 226.91 billion rupees, driven by healthy growth in loans.
In absolute terms, its gross bad loans eased from the previous quarter to 1.88 trillion rupees, helped by a slowdown in slippages. SBI shares which rose 3.1 percent after the results has reversed course to trade 2.1 percent lower by 0841 GMT.