After a relatively slower growth last year, the country’s largest lender State Bank of India (SBI), posted a 25 per cent jump in net profit to ₹3,879 crore in the July-September quarter of this fiscal.

The profit was driven by lower provisions for bad loans and strong performance of treasury operations. One-time profit repatriation from overseas branches helped other income grow substantially. Without inclusion of profit repatriation, profit grew by 15 per cent.

During the July-September quarter, the bank set aside ₹3,842 crore as provisions for bad loans, which is 7 per cent lower than that in the second quarter last year.

Advances pick up “In advances, we saw good pick up since June. We saw a reduction in our fresh slippages into bad loans this quarter. The working capital (loan demand) cycle is slowly shrinking and we are seeing more fresh project-linked loans,” said Arundhati Bhattacharya, Chairman, SBI. Net interest income (NII), the difference between interest earned and expended, stood at ₹14,253 crore, up 7 per cent, while other income jumped 36 per cent year-on-year to ₹6,197 crore.

Asset quality of the bank improved as against the worsening trend in a number of public sector banks.

Gross non-performing assets (NPAs) were at 4.15 per cent at the end of the September quarter compared with 4.29 per cent at the end of the June quarter and 4.89 per cent in the same quarter last year.

Due to a base rate cut by the bank, net interest margin (NIM) declined to 3.01 per cent from 3.11 per cent a year ago.

“We aim to restore NIM to the level (seen) at the start of the year (3.16 per cent at the end of March quarter), but it may not happen…We will need to move some amount from the government bond book to protect our NIMs,” Bhattacharya said.

Total advances grew 10 per cent on account of healthy corporate and retail loan growth. Deposits grew at a similar pace of 11 per cent.

On Friday, the shares of SBI closed at ₹243.25 apiece, 3.8 per cent higher than the previous close, on the BSE.

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