State Bank of India records highest-ever quarterly profit

New Delhi, Nov 09: India's largest lender, State Bank of India has recorded its highest-ever quarterly profit in the second quarter. The net profit of the bank increased by 74 per cent year on year for the quarter that ended on September 30 as the core income increased and bad loans provisions decreased as the non-performing assets (NPA) ratio witnessed a drop.

The net profit for the quarter was Rs 13,265 crore up from Rs 7,627 crore the previous year. The net profit more than doubled from quarter to quarter and the recorded profit is way higher than Bloomberg's estimates of Rs 10,262.

The loan growth was pushed by both retail and corporate segments with corporate loan outpacing retail loan growth by 21 per cent year-on-year, led by home loans portfolio that surged 14.57 per cent year-on-year at Rs 5.94 lakh crore as of September 30.

The productive increase in quarterly profit was attributed to solid interest income growth due to drastic increase in credit expansion. The net interest income increased 13 per cent year-on-year at Rs 35, 183 crore. This was due to a strong 20 per cent increase in credit growth, nearly 200 basis points higher than the industry average.

"Aggregate demand indicators show that the start of the holiday season and pent-up demand kept the growth impulses very strong," Dinesh Kara the chairman of the SBI said. SBI is also witnessing corporate credit demand from infrastructure, renewable energy, and oil marketing companies. The non-bank finance companies are driving the demand in the services sector, Khara said. He also predicted a 14 per cent to 16 per cent increase in credit growth by the end of the year.

Based on the current trends, we will most likely see credit growth of 14-16 per cent by this year end, Khara added.