SBI posts quarterly profit rise on loan growth, stake sale

State Bank of India posted a more than 14% rise in second-quarter profit on Tuesday, driven by robust loan demand and gains from a SBI Funds Management stake sale.

The country's largest lender by assets reported a net profit of 230.38 billion rupees ($2.43 billion) for the quarter ended September 30, up from 201.60 billion rupees a year earlier.

Indian banks' credit growth was strong in the September quarter, driven by lending to businesses and households. Business credit remained robust, including loans to small and medium enterprises, while retail demand was resilient, supported by housing and vehicle loans.

Additionally, Indian banks raised nearly $133 billion through foreign currency deposits from non-resident Indians under a special Reserve Bank of India scheme, boosting deposit growth and giving lenders funds to support loan growth.

SBI's net interest income, the difference between interest earned on loans and paid on deposits, grew 14.7% year-on-year to 491.43 billion rupees in the quarter.

Earnings were also boosted by gains from a nearly 6% stake sale in SBI Funds Management, including through a pre-IPO placement.

The lender recorded a one-time gain of 72.88 billion rupees from the sale of stake during the quarter.

SBI also divested a 0.65% stake in NSE during its IPO, but said profit from the sale was credited to capital reserve without routing through the profit and loss account.