India’s largest bank, State Bank of India on Friday announced a 200% year-on-year rise in net profit at Rs.4,050 crore, its highest ever, in the January-March quarter against Rs.21 crore a year ago, helped by a fall in provisions for bad loans and healthy credit demand.
The bank reported lower-than-expected profit in the same quarter of the previous fiscal year mainly due to higher provisioning for bad loans and increased tax outgo.
“We declared war on non performing assets (NPAs) and we seem to be winning it,” said Pratip Chaudhuri, chairman, SBI.
Loan loss provisions of the bank fell 13% to Rs.2,837crore during the fourth quarter from Rs.3,264crore in the same quarter of the previous year.
Gross non-performing assets, as a percentage of advances, declined 4.4% in the quarter against 4.61% in the third quarter.
“The bank managed to reduce its gross and net NPA ratios, which is contrary to what most of the other public sector banks delivered this season,” said Vaibhav Agrawal, vice-president, research-banking, Angel Broking. “In case of SBI most of the pain seems behind them and from here on the bank should be able to maintain healthy profitability relative to its peers.”
Investors cheered the result as shares of the bank shot up by 5% to close at Rs.1,942 on Bombay Stock Exchange on Friday.
For the entire fiscal ended March 2012, the net profit of the bank rose by 42% at Rs.11,707 crore compared to Rs.8,265 crore a year ago.
Net interest income (the difference between interest earned and interest paid) grew by 44% to Rs.11,591 crore during the quarter against Rs.8,058 crore in the same quarter a year ago whereas non interest income rose by 12% to Rs.5,376 crore from Rs.4,815 crore. Total income of the bank rose to Rs.33,960 crore in the quarter against Rs.26,537 crore in the same quarter a year ago.