Shares of State Bank of India ended 8 per cent higher at Rs. 307.05, up Rs. 22.65 (or 7.96 per cent) over the previous close.
The profit was driven by improvement in asset quality, higher non-interest income and operating profit.
Net interest income (difference between interest earned and expended) rose by 9 per cent to Rs. 13,777 crore during the quarter from Rs. 12,640 crore in the year-ago period.
Non-interest income jumped 24 per cent year-on-year to Rs. 5,238 crore on account of healthy treasury book. Operating profit grew 22 per cent to Rs. 9,294.5 crore in the December quarter.
Gross non-performing assets (NPA) as a percentage of total advances improved to 4.90 per cent in Q3FY15 from 5.73 per cent in the year-ago period. Sequentially, it remained almost flat against 4.89 per cent in previous quarter.
Net NPA was 2.80 per cent during the quarter against 3.24 per cent in the corresponding quarter of last fiscal.
Higher provisions for bad loans
However, the profit was limited due to higher provisions for bad loans that increased by 26 per cent year-on-year (up 22.5 per cent sequentially) to Rs. 5,235 crore.
As of December 2014, total advances grew 7 per cent year-on-year to Rs. 12.33 lakh crore while deposits were up 12 per cent to Rs. 15.10 lakh crore.
Though operating expenses rose 5.5 per cent to Rs. 9,720 crore on account of higher other operating expenses, the employee cost declined marginally to Rs. 5,842 crore from Rs. 5867 crore on yearly basis.
Source : Thehindubusinessline