JOIN USop Indian lender State Bank of India (SBI) reported an 81% jump in quarterly profit on Friday, helped by a one-time gain from selling a stake in its life insurance unit and a drop in provisions for bad loans.
The bank's shares rose as much as 4.1% in a weak Mumbai market as investors cheered the numbers and looked past a provision of 18.36 billion Indian rupees ($246 million) to cover for an expected wave of loan defaults stemming from the coronavirus pandemic.
Indian lenders are bracing for a surge in bad loans in a pandemic-ravaged economy, with the central bank's relief measures including deferments of loan and interest payments as well as low-interest rates expected to hurt the health of banks.
In the June quarter, however, SBI's asset quality improved, with gross bad loans as a percentage of total loans easing to 5.44% from 6.15% in the previous quarter and 7.53% a year earlier.
Provisions for bad loans fell 19% to 94.20 billion rupees ($1.26 billion).
A gain of 15.40 billion rupees from selling a stake in unit SBI Life Insurance helped push SBI's net profit to 41.89 billion rupees for the quarter from 23.12 billion rupees a year earlier.