Mumbai: State Bank of India (SBI) on Friday said its net profit for September quarter more than tripled year on year on the back of higher net interest income and one-time gain from SBI Life stake sale. This despite a 17% year on year jump in provisioning

The bank reported a net profit 3011.73 crore for the three months ended September compared with 944.87 crore in the year-ago period. A Bloomberg poll of 21 analysts had expected the state-owned lender to report a profit of 2292.8 crore.

Asset quality improved with fresh additions to bad loans nearly halving to 8805 crore at the end of September quarter compared to the preceding quarter. Gross non-performing assets (NPAs), as a percentage of total advances, stood at 7.2% in the September quarter compared with 7.5% in the June quarter and 9.95% in the year-ago quarter. Post provisions, net NPA ratio was at 2.79% against 3.07% in the April-June quarter and 4.84% in the year-ago quarter.

“We expect gross slippages in a not so good scenario to not exceed 2%. We believe that the current run rate of 8000 crore slippages per quarter in a 23 lakh crore loan book is normal," said Rajnish Kumar, managing director, SBI.

Provisions during the quarter increased 8.7% year on year to 13138.93 crore. In the April-June quarter, the bank had set aside 9812.94 crore in provisions. The management said that the bank has utilized the returns from the 4.5% stake sale in SBI Life insurance Company Ltd for boosting the provision coverage ratio which currently stands at 81.23%.

“The stake sale returns has been used to make specific provision of 2600 crore for the exposure to a housing finance company and stressed power accounts," said Kumar.

Operationally too the bank’s performance improved with net interest income, or the difference between interest earned on loans and paid on deposits, rising 17.7% year-on-year to 24600.32 crore. Other income, which includes core fee income, also rose 9.26% to 8538.39 crore in the reporting quarter.

Loan growth was muted at 8.65% year on year with retail book growing at 18.9%.

The bank is yet to move to the new tax regime yet, accordingly the deferred tax asset adjustment is pending to move to the new corporate tax rate of 26%.