STATE Bank of India, the country’s largest lender, on Friday (Aug 4) reported a near three-fold jump in first-quarter profit, led by a surge in net interest income, healthy loan growth and lower provisions.

Net profit was at a record 168.84 billion rupees (S$2.7 billion) for the quarter ended Jun 30, compared with 60.68 billion rupees a year earlier, the lender said in an exchange filing.

Net interest income, the difference between interest earned and paid out, rose 24.7 per cent to 389.05 billion rupees.

Net interest margin, a key indicator of a bank’s profitability, rose to 3.47 per cent from 3.23 per cent a year ago.

Larger rivals HDFC Bank and ICICI Bank have reported double-digit net interest income growth for the fiscal first quarter, spurred by consistent demand for loans.

Indian banks have been reporting double-digit credit growth in recent months, even as the Reserve Bank of India (RBI) raised interest rates by 250 basis points since last May, driven by rising consumption.

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SBI’s gross loans increased 13.9 per cent from a year earlier, while deposits climbed 12 per cent, led by term deposits that offer better returns.

Provisions and contingencies fell 43 per cent from a year ago to 25.01 billion rupees and lower than the 33.16 billion rupees reported in January-March.

SBI’s gross non-performing assets (NPA) ratio – a key metric of asset quality – fell to 2.76 per cent from 2.78 per cent in the previous quarter and 3.91 per cent a year ago. The net NPA ratio rose to 0.71 per cent from 0.67 per cent in the prior three months.

SBI shares were trading down 2.3 per cent after the results. The lender’s stock is down 6.2 per cent so far this year, underperforming the bank index which is up nearly 4 per cent. REUTERS