On August 12, 2010, State Bank of India, the largest lender of the country, announced its first quarter result. The bank observed a 25 percent rise in the net profit in the April-June quarter beating analysts’ expectations. Net profit rose to Rs. 29.14 billion from Rs. 23.30 billion at the same period last year. According to a poll of Dow Jones Newswire, conducted on 12 analysts, the forecast net profit for SBI was Rs.25.07 billion.
This high profit place SBI among top lenders of the country along with Bank of Baroda, Punjab National Bank and HDFC which reported strong growth in loan which resulted into heavy borrowings of the telecom operators to make license payments for buying 3G spectrum and broadband spectrum.
SBI’s interest income grew 6 percent to Rs. 184.52 billion from Rs. 174.73 billion in the corresponding period last year. Interest expenses fell 10 percent to Rs.111.48 billion from Rs. 124.48 billion driving the net interest income to Rs.73.04 billion against Rs.50.25 billion in the same period last year.
Other income such as fees, commissions, treasury and foreign exchange transactions grew to Rs. 36.90 billion from Rs. 35.69 billion.
After announcing the Q1 financial results, shares of SBI advanced 5 percent hitting a record high of
Rs .2,733.95 on the BSE. Despite a weak market SBI shares opened up with a strong note and pulled up Sensex . At the afternoon trading session, Sensex ended up moving 43.43 points at 18113.62.