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SBI profit rises 30%, NPAs under check

State Bank of India’s net profit rose by 30.2% to Rs 2,910 crore for third quarter ended December 2014, driven by a rise in net interest income, fees, and control on employee costs.

The country’s largest lender had posted net profit of Rs 2,234 crore in October-December 2013.

The improvement in performance drove its 6.6% to Rs 303 per share on Bombay Stock Exchange in early afternoon trading.

Showing benefit from cutting interest rates on deposits, SBI’s net interest income rose by 9.2% to Rs 13,777 crore from Rs 12,617 crore. The average cost of deposits declined to 6.25% from 6.32% a year ago. The average yield on advances improved to 10.57% in December 2014 from 10.4% in December 2013, SBI said in a statement.

Despite slow pick up in credit, it’s the non-interest income, comprising fees, commission, rose by 24.3% to Rs 5,237 crore, SBI said.

However, its credit costs – provisions for bad loans – rose sharply by 51.67% to Rs 4,717 crore in Q3 of FY-15 from Rs 3,429 crore in same quarter of FY-14. Consequently its provision coverage ratio improved to 63.56% in Q4 from 58.32% in Q3 of FY-14.

Consolidating on stable asset quality performance, the bank’s non-performing asset (NPA) ratio declined to 4.90 per cent in December 2014 from 5.73 per cent in December 2013.  In absolute terms, too, gross NPAs were down to Rs 61,991 crore from Rs 67,799 crore a year ago.

The net NPA ratio also was down to 2.80 from 3.24. 

Its loan book expanded by 7.28% to Rs 12, 32,544 crore. While deposits grew by 11.8% to Rs 15, 10,076 crore.  

Its staff expenses were down 0.43% from Rs 5,867 crore from Rs 5,842 crore. 

The capital adequacy ratio (CAR) under Basel III norms stood at 12.03%.

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