State Bank of India’s second-quarter profit jumps three-folds

SBI’s Net profit rose to 30.12 billion rupees in the three months ended Sept. 30 from 9.45 billion rupees a year earlier, the Mumbai-based bank said in a filing to stock exchanges.

State Bank of India (SBI) reported a three-fold jump in quarterly profit on Friday, buoyed by a 34.84 billion rupee ($491.15 million) gain from selling a portion of its life insurance unit, while asset quality also improved.

A man checks his mobile phone in front of State Bank of India (SBI) branch in Kolkata.(REUTERS)

Net profit rose to 30.12 billion rupees in the three months ended Sept. 30, from 9.45 billion rupees a year earlier, the country’s largest lender by asset said in an exchange filing. Analysts expected a profit of 21.28 billion rupees, according to Refinitiv data.

Shares of the lender were up over 6% after the results.

Mumbai-based SBI’s performance is a bright spot in India’s banking industry, where weak loan growth due to a slowdown in the economy has compounded the sector’s near $150 billion-bad loan problem.

SBI’s net interest income climbed 17.7% to 246 billion rupees, while provisions for bad loans ticked up 8.4%. Net interest margin, a key indicator of a bank’s profitability, rose to 3.22%, up 42 basis points from a year ago.

Private sector banks Axis Bank Ltd and Kotak Mahindra Bank Ltd warned earlier this week of stress in their corporate books, with Kotak cutting its expectation for full-year loan growth.

Asset quality improved at SBI, with gross bad loans as a percentage of total loans easing to 7.19% by Sept-end, compared with 7.53% in the previous quarter and 9.95% in the same period last year.