SBI Q3 net vaults 30% to Rs2,910 crore as bad loan growth slows

State Bank of India (SBI), the country's top lender by assets, reported a 30-per cent year-on-year increase in quarterly net profit at Rs2,910 crore ($468.4 million) from Rs2,234 crore in the year ago quarter.

Arundhati Bhattacharya, chairman SBITotal income of the bank in the October-December quarter rose to Rs43,784 crore against Rs39,068 crore during the corresponding quarter of the previous fiscal, on the back of increased retail lending and checks on unbridled corporate lending.

State Bank, which accounts for about a quarter of loans and deposits in the country, said its net interest income rose nine per cent to Rs13,777 crore from Rs12,640 crore during the corresponding period.

Net NPAs in the quarter fell to 2.8 per cent from 3.24 per cent during corresponding quarter of the previous year. However, provision for bad loans during the third quarter of current fiscal increased 26 per cent to Rs5,235 crore from Rs4,150 crore in the year-ago period.

Gross NPAs of the bank declined to 4.9 per cent in the third quarter from 5.73 per cent in similar period of last fiscal. It was lower at 4.89 per cent in the September quarter.

This has been achieved by tightening requirements for corporate lending and resorting to increased credit to consumers for homes and autos, a business where defaults are less, SBI said.

''We are doing every single thing that we can to improve asset quality,'' chairman  Arundhati Bhattacharya said in Mumbai on Friday after the earnings were released. ''SBI is individually following up on each account that is under stress to maintain the asset quality. A lot of hard work has gone into this.''

SBI shares surged over 8 per cent today, adding Rs16,910.27 crore to its market value, after the company's net profit in December quarter rose by 30 per cent.

Improvement in asset quality also helped the rally.

After climbing 8.26 per cent to Rs307.90 in intra-day trade on the BSE, the SBI scrip closed the day at Rs307.05, up 7.96 per cent from its previous close.

On the NSE, it zoomed 8.23 per cent to settle at Rs 307.70.