India's largest bank SBI reports record US$1 billion profit as provisions drop

BENGALURU :India's largest lender State Bank of India reported a record quarterly profit on Wednesday, as provisions for bad loans more than halved and credit costs slipped, sending shares up more than 3per cent 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 6.17per cent at the end of the September quarter, driven by a 15.17per cent jump in personal retail loans, the state-owned bank said. It had forecast an overall credit growth of 9per cent for fiscal 2022.

Net profit rose 66.7per cent to 76.27 billion rupees (US$1.02 billion) for the three months ended Sept. 30, beating analysts' expectations for a profit of 71.82 billion rupees, according to Refinitiv IBES data.

Net interest income rose 10.7per cent, while net interest margin, a key indicator of a bank's profitability, was 3.50per cent, up 16 basis points from a year ago.

Provisions for bad loans slid 52per cent, while the Mumbai-based bank's gross bad loan ratio, a measure of asset quality, slipped to 4.90per cent from 5.32per cent a quarter earlier. Credit cost declined 51 basis points to 0.43per cent.

Private-sector rivals ICICI Bank and HDFC Bank reported robust quarterly results last month on strong loan growth, but Axis Bank lagged its peers.

SBI shares, which have outperformed the blue-chip NSE Nifty 50 index so far this year with a near 90per cent jump, rose as much as 3.7per cent to a record high of 540.8 rupees after the results.

(US$1 = 74.5100 Indian rupees)

(Reporting by Chris Thomas in Bengaluru; Editing by Subhranshu Sahu)