Mumbai, Aug. 8: The State Bank of India (SBI) today surprised investors by reporting its first net profit growth in six quarters.
The net profit of the country’s largest bank rose 3.33 per cent to Rs 3,349 crore for the quarter ended June 2014 from Rs 3,241 crore in the corresponding period of last year.
Most analysts had expected the lender to post lower profits during the quarter under review.
The rise in profits came on the back of higher interest income, while the asset quality remained stable.
Net interest income (NII), which represents a bank’s core income, stood at Rs 13,252 crore, a robust growth of over 15 per cent from Rs 11,512 crore in the year-ago period.
Gross non-performing assets (NPAs) were stable at Rs 60,434 crore as of June 30 against Rs 60,891 crore last year.
While gross NPAs were also lower on a sequential basis, the SBI said fresh bad loans, too, showed a decline from Rs 13,766 crore to Rs 9,932 crore. However, write-offs jumped to Rs 6,556 crore from Rs 1,148 crore last year. Moreover, provisions against NPAs also rose to Rs 3,903 crore from Rs 2,266 crore in the same period last year.
During the quarter, gross advances rose to Rs 12,32,288 crore from Rs 10,95,145 crores in the year-ago period, a rise of nearly 13 per cent.
SBI chairperson Arundhati Bhattacharya said the bank expected advances to grow around 15 per cent in the current fiscal, adding that the lender was witnessing higher demand for auto loans.
Shares of SBI fell over 1 per cent to close at Rs 2,415.25 on the BSE today. On the NSE, the stock fell 1.34 per cent to Rs 2,403.45.
Bhushan Steel stance
The SBI chief said the lender would demand an external agency to take over the day-to-day management of Bhushan Steel.
On Thursday, the Central Bureau of Investigation had arrested the vice-chairman of the company in connection with a bribery case involving the chairman and managing director of Syndicate Bank.
The bank has called a meeting of the lenders’ consortium next week to discuss the proposal.
Domestic banks have an exposure of Rs 40,000-crore to Delhi-based Bhushan Steel.