State Bank of India net rises 37%

State Bank of India net rises 37%
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First Published: Sat, Jan 24 2009. 04 53 PM IST
Updated: Sat, Jan 24 2009. 04 53 PM IST
Mumbai: State Bank of India, the country’s top lender, said quarterly profit rose 37%, meeting forecasts, helped by robust loan growth and earnings from trading in bonds whose prices jumped as interest rates dropped.
The state-run bank, which along with its associates controls a quarter of India’s loans and deposits, said net profit rose to Rs24.78 billion in its fiscal third quarter ended December, from Rs18.09 billion reported a year ago.
A Reuters poll had forecast a net profit of Rs24.7 billion.
Treasury income, primarily from trading in bonds and securities, climbed 51.4% to Rs60.04 billion after bond yields tumbled 337 basis points in the quarter as the central bank slashed key rates to lift slowing growth. Bond prices move inversely with yield.
State Bank, which has over 11,000 branches across India and abroad, has the lowest cost of funds among the nation’s lenders.
The bulk of its funds come from savings bank deposits that carry a cost of 3.5% in annual interest payments, compared with 12.25% the bank charges on loans to its best clients.
Shares in State Bank, which the market values at about $13.5 billion, shed 12% in the December quarter, less than the 25% fall in the benchmark index and the 16% drop in the sector index.
The shares ended 4.3% lower at Rs1,041.75 on Friday in a Mumbai market that fell 1.6%.
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First Published: Sat, Jan 24 2009. 04 53 PM IST