* Net profit of 36.58 bln rupees vs 35.69 bln estimate
* SBI posts smallest net profit growth this year
* NPLs at 5.15 pct at end-Sept vs 4.19 pct yr ago
* Shares fall as much as 3.77 pct after results
MUMBAI, Nov 9 State Bank of India (SBI)
, the country's biggest lender, posted its smallest
profit increase this year as bad loans constrained earnings
growth, sending its shares lower.
Problem lending has risen to a record as India's worst
economic slowdown in almost a decade clouds the outlook of the
country's banks including SBI, which accounts for a quarter of
all loans and deposits.
The state-owned bank, which has exposure to debt-laden firms
such as Kingfisher Airlines Ltd, Air India Ltd
and Deccan Chronicle Holdings Ltd, said bad
loans rose to 5.15 percent of its loan book as of the end of
September from 4.19 percent a year earlier.
Net profit for the quarter ended Sept. 30 increased about 30
percent from a year earlier to 36.58 billion rupees ($671.13
million). That compares with a more than doubling in net income
in the previous quarter.
Analysts, on average, had expected a net profit of 35.69
billion rupees, according to Thomson Reuters I/B/E/S.
Shares in SBI fell as much as 3.77 percent in Mumbai
trading, the biggest decline in a week. As of 0715 GMT, the
stock was down 2.64 percent at 2,183.1 rupees, compared with a
0.42 percent drop in the benchmark 30-share BSE index.
SBI has been aggressive in identifying bad loans and making
adequate provisions since Chairman Pratip Chaudhuri took reins
of the bank in 2011. Still, problem loans at the bank are the
highest in the industry. That, coupled with low capitalisation,
prompted ratings agency Moody's to downgrade the bank last year.
Bad loans increased by nearly 45 percent to 492 billion
rupees in the September quarter compared with a year earlier,
Net interest income, or the difference between interest
earned and interest paid out, rose nearly 63 percent during the
Large state-owned banks such as Punjab National Bank
and Canara Bank Ltd earlier posted drops in
net profit and a spike in bad loans in the fiscal second
quarter, hurt by the economic slowdown.
(Reporting by Swati Pandey; Editing by Ryan Woo)