SBI Q3 net profit surges 30 per cent, shares gain nearly 7 per cent

State Bank of India, the country's largest lender by assets, reported a 30 per cent increase in quarterly profit, lagging estimates, although bad loans rose less than feared, sending its shares nearly 7 per cent higher.

SBI, which accounts for about a quarter of the domestic loans and deposits, said net profit rose to Rs 2,910 crore ($468.4 million) from Rs 2,234 crore a year earlier.

Analysts on average had expected a net profit of Rs 3,274 crore, according to data compiled by Thomson Reuters.

Gross bad loans ratio stood at 4.9 per cent in the December quarter, compared with 4.89 per cent in the September quarter.

SBI's scrip surged nearly 7 per cent after it reported its quarterly results. Shares of the state-run bank closed at Rs 307. 05 a piece, up 22.65 points (or 7.96 per cent) on the Bombay Stock Exchange (BSE).

The bank also said its board has decided to issue equity shares worth Rs 2,970 crore to the government on preferential basis.

The decision came after the government, last week said it will infuse Rs 2,970 crore into the country's largest lender under its Rs 11,200 crore capital infusion plan for public sector banks announced in the Budget for 2014-15.

"The board has decided to create, offer and issue equity shares of Rs 1 each, ranking pari-passu with the existing equity shares of the bank in all respect including payment of dividend, by way of preferential issue to the government, subject to the regulatory approvals," the bank said in a filing to the stock exchanges.

The board has also decided to seek approval of the government and Reserve Bank to increase the issued capital by raising additional equity share capital up to Rs 2,970 crore by way of the preferential issue.

(Reuters with PTI inputs)