MUMBAI, Nov. 5 (Reuters) – State Bank of India (SBI) (SBI.NS)The country’s largest lender expects credit growth to remain in the double digits, while stepping up its efforts to attract more deposits, with growth in line with the sector.
The bank reported a 74% surge in quarterly net income on Saturday. This was driven by loan growth and improved asset quality.
Net profit reached a record INR 132.64 billion ($1.62 billion) for the June-September period, beating analysts’ forecast of INR 105.3 billion, according to Refinitiv IBES data.
Net interest income, the difference between interest earned and interest paid, increased by 13% to Rs 351.82 billion.
Advance payments increased by 18.15% and deposits by 9.99%.
“Credit growth should be 14-16 per cent this year,” Chairman Dinesh Kumar Kalla told a news conference.
“There is also treasury investment now, and we expect it to clear, so we are confident that it will support credit growth.”
The bank has a term loan pipeline of Rs 2.4 trillion as demand is expected from sectors such as infrastructure, renewable energy and services.
And while the bank has not provided a target growth rate for deposits, Khara said SBI will not lag behind the industry.
Bank credit in India increased by 17.95% year-on-year in the two weeks to 7 October, and market participants expect growth to accelerate in the coming months, according to central bank data. Deposit growth during this period was 9.63%.
SBI’s core net interest margin (NIM), a key indicator of profitability, improved to 3.55% from 3.50% a year earlier. Domestic NIM is expected to remain at current levels.
Lender asset quality also improved, with total non-performing assets (NPA) falling to 3.52% from 3.91% over the past three months. Net NPA also improved, down 20 basis points.
Gross provisions decreased to INR 30.39 billion from June to September from INR 43.92 billion in the previous quarter.
The bank’s capital adequacy ratio stood at 13.51%, up from 13.35% a year earlier.
($1 = 81.9620 Indian Rupees)
Reported by Nupur Anand, Mumbai and Neha Arora, New Delhi.Edited by Mark Potter
Our criteria: Thomson Reuters Trust Principles.