BENGALURU: India's largest lender State Bank of India reported a record quarterly profit on Wednesday (Nov 3), as provisions for bad loans more than halved and credit costs slipped, sending shares up more than 3 per cent to an all-time high.
Most large Indian banks have reported higher profits for the September quarter, buoyed by a rebound in credit demand as the economy reopened fully and low interest rates boosted spending on automobiles and homes.
SBI's credit growth was 6.17 per cent at the end of the September quarter, driven by a 15.17 per cent jump in personal retail loans, the state-owned bank said. It had forecast an overall credit growth of 9 per cent for fiscal 2022.
Net profit rose 66.7 per cent to 76.27 billion rupees (US$1.02 billion) for the three months ended Sep 30, beating analysts' expectations for a profit of 71.82 billion rupees, according to Refinitiv IBES data.
Net interest income rose 10.7 per cent, while net interest margin, a key indicator of a bank's profitability, was 3.50 per cent, up 16 basis points from a year ago.
Provisions for bad loans slid 52 per cent, while the Mumbai-based bank's gross bad loan ratio, a measure of asset quality, slipped to 4.90 per cent from 5.32 per cent a quarter earlier. Credit cost declined 51 basis points to 0.43 per cent.
Private-sector rivals ICICI Bank and HDFC Bank reported robust quarterly results last month on strong loan growth, but Axis Bank lagged its peers.