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Sunday, January 25, 2009

State Bank of India net rises 37 pct, meets f'cast

State Bank of India (SBIN.NS : 1041.5 -48.8), the country's top lender, said quarterly profit rose 37 percent, meeting forecasts, helped by robust loan growth and earnings from trading in bonds whose prices jumped as interest rates dropped.

The state-run bank, which along with its associates controls a quarter of India's loans and deposits, said net profit rose to 24.78 billion rupees ($503 million) in its fiscal third quarter ended December, from 18.09 billion rupees reported a year ago.

A Reuters poll had forecast a net profit of 24.7 billion.

Treasury income, primarily from trading in bonds and securities, climbed 51.4 percent to 60.04 billion rupees after bond yields tumbled 337 basis points in the quarter as the central bank slashed key rates to lift slowing growth. Bond prices move inversely with yield.

State Bank, which has 11,000 branches across India and abroad, has the lowest cost of funds among the nation's lenders.

The bulk of its funds come from savings bank deposits that carry a cost of 3.5 percent in annual interest payments, compared with 12.25 percent the bank charges on loans to its best clients.

Shares in State Bank, which the market values at about $13.5 billion, shed 12 percent in the December quarter, less than the 25 percent fall in the benchmark index and the 16 percent drop in the sector index.

The shares ended 4.3 percent lower at 1,041.75 rupees on Friday in a Mumbai market that fell 1.6 percent.

No.2 lender ICICI Bank (ICICIBANK.NS : 363.85 -14.2) is scheduled to announce quarterly results later in the day.

News : State Bank of India net rises 37 pct, meets f'cast

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