BENGALURU (Reuters) – State Bank of India posted a more than four-fold jump in fourth-quarter profit on Friday, benefiting from better asset quality and a one-time gain from a stake sale in its card unit, sending the shares of the country’s largest lender by assets up 8%.
The bank’s gross bad loans as a percentage of total loans, a measure of asset quality, eased to 6.15% from 6.94% in the previous quarter, while provisions for bad loans fell 31.4% to 118.94 billion rupees.
SBI’s results are a bright spot for the bad loan-burdened Indian financial sector that has been hit severely as the coronavirus forced a nationwide lockdown.
Soured assets across the industry are expected to double due to the crisis, Reuters reported in May, citing sources.
Net profit for the three months ended March 31 jumped to 35.81 billion rupees ($474.46 million) from 8.38 billion rupees a year earlier.
The Mumbai-based bank recorded a gain of 27.31 billion rupees from selling a 4% stake in SBI Cards and Payment Services last year, it said https://www.bseindia.com/xml-data/corpfiling/AttachLive/24590e7c-aca3-49ed-a033-3509f12b2612.pdf in a regulatory filing.
Analysts had expected a profit of 71.32 billion rupees, according to Refinitiv data. It was not immediately clear if the numbers were comparable.
Net interest income slipped 0.8% to 227.67 billion rupees, while net interest margin, a key measure of profitability, rose to 2.94% from 3.02% last year.
($1 = 75.4757 Indian rupees)
(Reporting by Chris Thomas in Bengaluru; Editing by Vinay Dwivedi and Arun Koyyur)