State Bank of India Q4 net jumps 46 pct, beats forcast

By Sujoy Dhar

KOLKATA (Reuters) - State Bank of India, India's largest lender, reported a forecast-beating 45.6 percent rise in quarterly profit after gains from trading trebled and loan demand soared as borrowers scurried for funds in a slowing economy.

Pretax earnings from the bank's treasury operations, mainly from trading in bonds and other securities, jumped to 37.45 billion rupees ($760 million) from 12.31 billion rupees in the year to March 2008, it said in a statement.

The bank, which along with its associates controls a quarter of Indian banks' loans and deposits, did not provide quarterly figures for its treasury operations.

"Our treasury did well. Our treasury, which was a residual one, has come into its own," chairman O.P Bhatt told a news conference.

State Bank, which has 11,000 branches in India and abroad, also gained from robust loan demand of 30 percent in 2008/09 after it slashed rates on mortgages, car loans and mid-corporate advances under government pressure to boost the economy.

The robust loan growth helped the lender shrink gross bad debts as a percentage of loans to 2.84 percent in the quarter, from 3.04 percent a year ago.

Bhatt expected loans and deposits, which jumped 38.1 percent in 2008/09, to grow by a quarter in the year to March 2010.

"I don't think this momentum will continue as people will look at investing in the stock market and real estate," he said.