State Bank of India beat expectations and posted its highest quarterly profit in nearly seven years on Friday, as the country's biggest lender by assets set aside lower provisions for bad loans and asset quality improved.
Its 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 analysts' expectations for a profit of 32.08 billion rupees, according to Refinitiv data.
This is the bank's biggest quarterly profit since it reported a bottomline of 40.50 billion rupees in the March quarter of 2012.
In the current quarter, SBI's provisions for bad loans dropped 21.3 percent to 139.71 billion rupees from a year earlier, the bank said in a stock exchange filing https://www.bseindia.com/xml-data/corpfiling/AttachLive/d055d87a-e135-4470-ab6f-9e3028373b7c.pdf.
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.
SBI, which accounts for more than a fifth of India's banking assets, saw its gross bad loans as a percentage of total loans ease to 8.71 percent at end-December, from 9.95 percent in the previous quarter and 10.35 percent in the year-ago period.
In absolute terms, its gross bad loans eased from the previous quarter to 1.88 trillion rupees, helped by a slowdown in slippages.
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