SBI Q4 net up 23% at Rs 3,742 cr

State Bank of India, the nation's top lender by assets, reported a better-than-expected 23% rise in quarterly profit on Friday and said its bad loan ratio declined sharply, sending its shares up by more than 5%.

The bank's gross bad loans ratio stood at 4.25% in its fourth quarter ended March, compared with 4.9% in the December quarter. The net non-performing loan ratio fell to 2.12% in the March quarter from 2.80% a quarter earlier.

Two straight years of weaker economic expansion and stretched corporate balance sheets have led to a surge in Indian banks' bad loans. Government-owned lenders led by the SBI, which dominate India's banking sector with more than 70% share of loans, have amassed bad loans at a faster pace than their private sector rivals.

The bank said earlier that it had increased scrutiny and improved monitoring systems to contain bad loans.

SBI, which accounts for about a quarter of Indian loans and deposits, said net profit in the quarter rose to Rs 3,742 crore ($589 million) from Rs 3,041 crore a year earlier.

Analysts on average had expected a net profit of Rs 3,723 crore, according to Thomson Reuters data.

Weaker economic activity has also taken a toll on loan growth for banks. SBI reported a 7.25% rise in total loans for the year to March compared with the overall banking sector's loan growth of 12.6%. Retail loans grew almost 15%, faster than corporate loans.

Local net interest margin for the bank rose 5 basis points for the fiscal year to 3.54%.

SBI shares were trading 2% higher at Rs 296.05 in a Mumbai market that was up 0.6%. The stock rose as much as 5.1% after the results.

State Bank of India