State Bank of India first-quarter profit nearly triples to all-time high

MUMBAI/BENGALURU, Aug 4 (Reuters) - State Bank of India (SBI.NS), the countrys largest lender, on Friday 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 ($2.04 billion) for the quarter ended June 30, compared with 60.68 billion rupees a year earlier.

Net interest income, the difference between interest earned and paid out, rose 24.7% to 389.05 billion rupees, while net interest margin, a key indicator of a banks profitability, rose to 3.47% from 3.23% a year ago.

However, slippages more than doubled to 76.59 billion rupees sequentially, primarily from small and medium enterprises and agriculture lending.

Rivals HDFC Bank (HDBK.NS) and ICICI Bank (ICBK.NS) have reported double-digit net interest income growth for the fiscal first quarter.

Indian banks have been reporting double-digit credit growth in recent months, driven by rising consumption, even as the Reserve Bank of India raised interest rates.

SBIs corporate lending book pipeline stands at 3.5 trillion rupees, Chairman Dinesh Kumar Khara said in a news conference. Khara expects credit growth of 15% this fiscal year.

The banks gross loans increased 13.9% from a year earlier, while deposits climbed 12%, led by term deposits that offer better returns.

Provisions and contingencies fell 43% from a year ago to 25.01 billion rupees.

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

The bank expects its net NPA ratio to fall to 0.5% in the next few quarters, Khara said.

SBIs shares, which have lost 6.6% this year, ended 2.9% down.

($1 = 82.7925 Indian rupees)