The State Bank of India (SBI) office building is pictured in Kolkata, India, February 9, 2018. Reuters/Rupak De Chowdhuri/File Photo
Shares in State Bank of India reached a record after profit at the nation’s largest lender beat estimates, helped by write-backs and fewer provisions for bad loans.
Net income in the second quarter jumped 67% to 76.3 billion rupees ($1.02 billion) in the quarter ending September, according to a statement Wednesday. That exceeded the average estimate of 66.5 billion rupees from 16 analysts questioned in a Bloomberg survey.
Shares gained 2.7%, while the broader banking gauge was 0.5% lower at 2:16 p.m. in Mumbai.
India’s largest bank joins local peers in posting strong results following a surge in retail lending due to low interest rates and festive discounts. SBI, which controls a fifth of the country’s loan market, is a key barometer of the nation’s financial health and its growth plans play a key role in the economy’s revival.
SBI’s retail loan book grew 15.2% from a year ago, driving its overall advances due to high festive demand.
SBI’s asset quality and overall lending metrics have been relatively good compared with other state peers. The lender’s bad loan ratio narrowed to 4.9% in the three months to September from a 5.32% rise in the previous quarter. It set aside 1.89 billion rupees in provisions during the quarter, down from the 100.5 billion rupees in the three months earlier and 101.2 billion rupees a year ago.
