BENGALURU/MUMBAI (Reuters) -State Bank of India, the country’s largest lender by assets, reported a better-than-expected quarterly profit on Thursday driven by strong loan growth.
The state-run lender reported a net profit of 168.91 billion rupees ($1.93 billion) in the third quarter, compared with 91.64 billion rupees a year ago.
Analysts, on average, were expecting a profit of 164.72 billion rupees, according to data compiled by LSEG.
SBI had registered a one-time hit of 71 billion rupees to its profit a year ago, as it set aside more provisions for wage revisions and pension costs.
SBI’s domestic loans grew 14.06% in the quarter, which coincides with the country’s festive season.
Corporate loans increased by 14.86% on year, while retail personal loans were up 11.65%.
Meanwhile, its domestic deposits rose 9.76%.
Indian lenders have been scrambling to raise deposits to meet rising demand for credit. Increased competition for deposits has pushed banks to either raise interest rates for deposits or slow loan growth, which has hurt margins.
SBI’s domestic net interest margin slipped to 3.15% from 3.34% a year earlier and 3.27% in the previous quarter.
The bank’s net interest income, or the difference between interest earned on loans and paid on deposits, increased 4% to 414.46 billion rupees, as per Reuters calculations.
Its gross non-performing assets ratio improved to 2.07% from 2.13% in the prior quarter.
Slippages, or the proportion of good loans turning bad, dropped to 38.23 billion rupees from 49.60 billion rupees last year.
($1 = 87.5725 Indian rupees)
(Reporting by Nishit Navin and Siddhi Nayak; Editing by Varun H K)
