MUMBAI, May 13 (Reuters) – India’s biggest lender State Bank of India (SBI) missed fourth-quarter profit expectations despite reporting record earnings, mainly due to higher overhead costs and interest expenses.
Shares of SBI, seen as a bellwether for the broader lending industry, reversed course and traded down 3% in mid-day trade, after surging as much as 3.1% immediately after reporting results.
Most Indian lenders have reported healthy growth for the quarter on an uptick in loan growth and improving asset quality, which has helped to keep provisions low.
Net profit for the quarter ended March 31 was 91.14 billion Indian rupees, up from 64.51 billion a year earlier but short of the 101.60 billion expected by 14 analysts on average, Refinitiv IBES data showed.
Interest expenses grew 4% to 395.35 billion rupees while overhead costs were nearly 6% higher, and up 29.1% from the previous quarter.
SBI set aside 32.62 billion rupees as a provision for loan losses, down from the 99.14 billion it set aside a year earlier, the bank said in a filing to exchanges on Friday.
Income from interest on loans grew 8.65% to 707.33 billion rupees while overall lending grew 11% driven by a strong 15.1% growth in retail loans.
($1 = 77.2920 Indian rupees)
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