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SBI reports first profit growth in six quarters, at 3 per cent

The bank's standalone net profit rose 3.3 per cent year-on-year to Rs 3,349 crore ($545.22 million) in its fiscal first quarter to June 30, in line with analysts' estimate of Rs 3,335 crore.

Devidutta Tripathy   Mumbai     Last Updated: August 8, 2014  | 16:05 IST
State Bank of India Q1 net up 3%, in line with estimates
(Photo: Reuters)

State Bank of India, the nation's top lender by assets, reported its first profit increase in six quarters on Friday on higher interest income, and said that bad loans were largely stable.

SBI, which accounts for about quarter of loans and deposits in India, said standalone net profit rose 3.3 per cent year-on-year to Rs 3,349 crore ($545.22 million) in its fiscal first quarter to June 30, in line with analysts' estimate of Rs 3,335 crore.

Interest earned for the quarter rose 15 per cent from a year earlier to Rs 36,487 crore.

Net non-performing loans as a percentage of total assets were 2.66 per cent in June quarter from 2.57 per cent in the previous three months, but gross non-performing loans were 4.9 per cent compared with 4.95 per cent in March quarter, the bank said.

Slower credit growth and a rise in bad loans have dragged the bank's profits lower for every quarter since the three-months ended December 2012.

A surge in bad loans has been one of the biggest challenges for the lenders, and state-run banks have seen bad loans piling up faster than their private sector peers.

SBI, which is nearly 59 per cent owned by the Indian government, this year pledged to increase scrutiny of bad loans by doing regular reviews and using technology.

Indian lenders are hoping to see loan growth led by a revival in economic growth and project approvals after a new government took power this year. The economy grew less than 5 per cent in the past two fiscal years, slowing loan growth and increasing borrower defaults.

Shares of SBI were trading 0.58 per cent down at Rs 2423.05 during afternoon trade on the Bombay Stock Exchange. The stock has risen more than a third this year, outperforming the broader National Stock Exchange Nifty.

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