India's State Bank Q1 net up 15.1 pct, beats f'cast

MUMBAI, July 26 (Reuters) - State Bank of India (SBI.BO: Quote, Profile, Research, Stock Buzz), India's largest bank, posted a 15.1 percent rise in quarterly net profit on Saturday, beating forecasts, helped by its access to low-cost funds.

The state-run bank, which raised $4.1 billion in a rights issue in March, said its net profit in April-June, its fiscal first quarter, rose to 16.41 billion rupees ($388 million) from 14.26 billion rupees reported a year earlier.

A Reuters poll of analysts had forecast a 2.9 percent rise in March quarter earnings to 14.67 billion rupees.

State Bank, which has more than 10,000 branches across India and overseas, has the lowest cost of funds among the nation's lenders. The bulk of its funds come from savings bank deposits that cost about 3.5 percent in annual interest payments.

Shares in State Bank shares fell 31 percent in the June quarter, faring worse than the 14 percent drop in the main share index .BSESN and a 23 percent slump in the banking sector index ($1=42.3 rupees) (Reporting by Narayanan Somasundaram; Editing by Lincoln Feast) ((narayanan.somasundaram@thomsonreuters.com; 91 22 6636 9068; Reuters Messaging narayanan.somasundaram.reuters.com@reuters.net))