For the quarter under review, SBI posted standalone net profit at Rs 3,879.07 crore against Rs 3,100.41 crore in the same quarter last year. (Photo: Reuters)
Shares of the country’s top lender by assets State Bank of India (SBI) gained on Friday after the company reported better-than-expected 25 per cent rise in its standalone net profit figures for the second quarter ended September 30, 2015 on the back of higher interest income and a drop in bad loans.
At 1.46 am, SBI shares were trading 2.46 per cent up at Rs 239.95. The scrip opened at Rs 235.20 and had touched a high and low of Rs 244.70 and Rs 233.10, respectively, in trade so far. Later, the scrip of the company closed 3.86 per cent up at Rs 243.25.
For the quarter under review, SBI posted standalone net profit at Rs 3,879.07 crore against Rs 3,100.41 crore in the same quarter last year.
Vaibhav Agrawal, VP research, banking, Angel Broking, said, “State Bank of India reported 2QFY2016 results, which were above our as well as street expectations. The bank’s core strength has been its high CASA and fee income, which has supported its core profitability in challenging times. Its strong capital adequacy also provides comfort. In our view, the stock is currently trading at a moderate valuation of 0.9x FY2017E ABV as compared to its peers. Hence, we recommend a ‘Buy’ rating on the stock.”
Analysts on average had expected the lender to report a net profit of Rs 3,639 crore, according to data compiled by Thomson Reuters.
Gross bad loans as a percentage of total loans dropped to 4.15 per cent from 4.29 percent in the June quarter. Provisions for bad loans dropped almost 7 per cent.
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