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UPDATE 1-State Bank of India swings to Q2 profit, shows improvement in bad loans

Stock MarketsNov 10, 2017 14:10
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© Reuters. UPDATE 1-State Bank of India swings to Q2 profit, shows improvement in bad loans

* SBI Q2 net profit 15.82 bln rupees vs 5.57 bln loss yr ago

* Shares up over 4 pct

* Bank of India Q2 net profit jumps 41 pct, beats estimates (Adds Bank of India results, SBI shares and industry background)

Nov 10 (Reuters) - State Bank of India (SBI) SBI.NS , the nation's biggest lender by assets, reported a second-quarter profit compared with a loss year ago, and a sequential improvement in its bad-loan ratio, sending its shares higher.

Net profit came in at 15.82 billion rupees ($243.25 million) for the quarter ended Sept 30, lower than analysts' estimates of 26.96 billion rupees, but compared with a net loss of 5.57 billion rupees a year earlier.

Bank of India BOI.NS , the market's sixth-biggest lender by assets, reported a 41 percent jump in second-quarter net profit on Friday, handily beating analysts' estimates, as its bad loan ratio also narrowed. which accounts for more than a fifth of India's banking assets, said gross bad loans as a percentage of total loans fell to 9.83 percent at the end of September from 9.97 percent three months earlier. drop came after the bank's bad loans had climbed since SBI merged its five subsidiary banks with itself earlier in the year. The year-ago numbers have also been restated after the merger.

Its second-quarter profit was also helped by a stake sale in SBI Life Insurance SBIL.NS , which listed last month.

Net interest income rose nearly 3 percent from a year earlier to 185.86 billion rupees while total provisions including for bad loans rose almost 27 percent to 184.18 billion rupees, the lender, majority owned by the Indian government, said on Friday.

State-run lenders accounted for the bulk of Indian banks' record 9.5 trillion-rupee soured loan pile as of June. The surge in bad loans has choked new lending in an economy which needs revival in investment to help spur growth.

SBI Chairman Rajnish Kumar, who was named to his position just last month, has said tackling of bad loans would be a key priority, although the bank will not shy away from growth opportunities. shares were up 4.3 percent at 0749 GMT in a Mumbai market .NSEI that was down 0.08 percent. The stock is the second-best performer among the constituents of the NSE Nifty main market index, having gained about 22 percent in the past one month to Thursday. ($1 = 65.0350 Indian rupees)

UPDATE 1-State Bank of India swings to Q2 profit, shows improvement in bad loans
 

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