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.