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Largest Indian bank's profit surges as loan provisions fall
[MUMBAI] State Bank of India, the country's largest lender by assets, more than doubled its fourth-quarter profit, beating analysts estimates, as bad-loan provisions fell. The stock climbed to a two-year high.
Net income climbed to 28.1 billion rupees (S$603.8 million), or 3.55 rupees a share, in the three months ended March 31 from 12.6 billion rupees, or 1.64 rupees, a year earlier, the Mumbai-based lender said in an exchange filing on Friday. Profit beat the 27.9 billion-rupee average of 21 analyst estimates compiled by Bloomberg.
In the past two years, SBI Chairman Arundhati Bhattacharya has been grappling with slowing loan expansion and mounting bad loans, the key stumbling blocks to profit growth in the Indian banking industry. Lawmakers recently approved a proposal giving the Reserve Bank of India more powers to resolve the nation's US$180 billion pile of stressed loans.
The lender's provisions for bad debt dropped to 110 billion rupees in the March quarter from 121 billion rupees a year earlier. Gross bad loans as a percentage of total lending narrowed to 6.9 per cent from 7.23 percent in the December quarter.