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Bengaluru: State Bank of India (SBI) reported a record quarterly profit on Wednesday, as provisions for bad loans more than halved and credit costs slipped, sending shares up more than 3% 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% at the end of the September quarter, driven by a 15.17% jump in personal retail loans, the state-owned bank said. It had forecast an overall credit growth of 9% for fiscal 2022.
Net profit rose 66.7% to Rs 7,627 crore ($1.02 billion) for the three months ended September 30, beating analysts’ expectations for a profit of Rs 7,182 crore, according to Refinitiv IBES data.
Net interest income rose 10.7%, while net interest margin, a key indicator of a bank’s profitability, was 3.50%, up 16 basis points from a year ago.
Provisions for bad loans slid 52%, while the Mumbai-based bank’s gross bad loan ratio, a measure of asset quality, slipped to 4.90% from 5.32% a quarter earlier. Credit cost declined 51 basis points to 0.43%.
Private-sector rivals ICICI Bank and HDFC Bank reported robust quarterly results last month on strong loan growth, but Axis Bank lagged behind its peers.
SBI shares, which have outperformed the blue-chip NSE Nifty 50 index so far this year with a near 90% jump, rose as much as 3.7% to a record high of Rs 540.8 after the results.