Mumbai: State Bank of India Ltd posted a bigger-than-expected profit in the fiscal second quarter as asset quality improved. Shares jumped.
Net income more than tripled to Rs30.1 billion (Dh1.56 billion, $424 million) for the three months ended September 30 from Rs9.4 billion a year earlier, India’s largest lender said on Friday. Analysts had expected a profit of Rs22.9 billion on average, according to estimates compiled by Bloomberg.
The Mumbai-based bank’s soured debt ratio narrowed even as the banking system contended with slow progress in resolving some of the big stressed accounts, such as Essar Steel India Ltd, business tycoon Anil Ambani’s group companies and Dewan Housing Finance Corp. SBI’s gross bad-loan ratio stood at 7.2 per cent compared with 7.53 per cent at the end of June.
“Bad loans seem to be under control for the time being,” said Siddharth Purohit, a banking analyst at SMC Global Securities. “The bank has to keep the non-performing assets under control for another two quarters before investors can put that worry out of their minds.”
Shares of SBI surged 7.1 per cent, the most in a month, at 2:23pm in Mumbai. The stock was the biggest gainer on the 10-member Bankex index.