India’s top lender SBI Q4 fails to win

A man checks his mobile phones in front of the State Bank of India (SBI) branch in Kolkata, India February 9, 2018. REUTERS/Rupak De Chowdhuri

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MUMBAI, May 13 (Reuters) – India’s largest lender, the State Bank of India (SBI) (SBI.NS), missed earnings expectations for the fourth quarter despite reporting record earnings, mainly due to higher overheads and interest expenses.

Shares of SBI, seen as a guard rail for the broader lending industry, reversed course and traded 3% lower in midday trading after surging as much as 3.1% immediately after the results were announced.

Most Indian lenders reported healthy growth for the quarter on a pick-up in loan growth and improving asset quality, which helped keep provisions low.

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Net income for the quarter ended March 31 was 91.14 billion Indian rupees, up from 64.51 billion a year earlier but less than the 101.60 billion expected by 14 average analysts, according to data from Definitely showed IBES.

Interest expense rose 4% to Rs.395.35 billion while overheads rose nearly 6%, up 29.1% qoq.

SBI has set aside Rs 32.62 billion in provisions for loan losses, compared with the Rs 99.14 billion it set aside a year earlier, the bank said in a filing with the bourses on Friday.

Lending interest income rose 8.65% to Rs.707.33 billion, while total lending rose 11%, driven by strong 15.1% growth in personal loans.

($1 = 77.2920 Indian Rupees)

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Reporting by Nupur Anand; Writing from Sudarshan Varadhan; Adaptation by David Evans and Jason Neely

Our standards: The Thomson Reuters Trust Principles.

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