State Bank of India (SBI), the country’s largest lender, reported profits that beat estimates as bad loans fell and interest income rose in the fourth quarter of 2014-15.

For the quarter ended March 31, 2015, SBI posted a 23 per cent increase in net profit to ₹3,742 crore against ₹3,041 crore in the year-ago period.

The result underscored Chairman Arundhati Bhattacharya’s progress in bolstering profit by curtailing bad loans and pushing credit growth.

“The stress is coming down,” said Bhattacharya, who has set up specialised teams to cope with bad loans. “Going forward we do believe that we'll be able to hold (the bad loan ratio) at this level or over a period of time try and bring it further down,” she told a news conference here.

SBI’s gross non-performing assets were down to ₹56,725 crore (₹61,605 crore) while the net NPAs dipped to ₹27,591 crore (₹31,096 crore).

The bank also sold ₹4,510 crore worth loans to asset reconstruction companies (ARCs).

According to Bhattacharya, the write-offs for the quarter were down at ₹4,874 crore against ₹5,698 crore. Recoveries improved to ₹4,485 crore (₹3,389 crore).

Tightened up operations limited the fresh slippages to ₹4,769 crore against ₹7,947 crore. Provisions increased at ₹6,593 crore against ₹5,891 crore on a yearly basis. “This has been a year of consolidation. Consolidation has been done not just in regular lines of business, but we have also explored new digital business opportunities,” said Bhattacharya.

Net interest income rose to ₹14,711 crore compared with ₹12,903 crore in the corresponding quarter of the last fiscal year. Total income (net interest income and other income) increased by nearly 15 per cent to ₹48,616 crore (₹42,443 crore).

Though treasury operations for the period reported a 118 per cent jump in profit before tax to ₹2,739 crore (₹1,257 crore), both retail and wholesale (or corporate) operations reported a dip in profits — by a little over 32 per cent to ₹4,208 crore, and by about 41 per cent to ₹1,210 crore, respectively.

Full year performance For the full year ended March 31, the standalone net profit grew by over 20 per cent to ₹13,102 crore (₹10,891 crore). Total income rose to ₹1,74,973 crore from ₹1,54,904 crore.

According to Bhattacharya, the bank’s net interest margin stood at 3.16 per cent. “We will be happy to keep the NIM around the 3.50 per cent mark,” she said.

For 2014-15, the bank’s board declared a dividend of ₹3.50 a share of face value of ₹1 each.

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