Mumbai, Jan 22 (Agencies): The SBI Chairman O P Bhatt said if not for the massive voluntary hike in provisioning for bad assets during the period under review, the profit would have jumped by 32.31 per cent to Rs 3,280 crore.

The gross non-performing assets (NPAs) of the bank, however, rose to 3.17 per cent at the end of December, 2010, from 3.11 per cent at the end of December, 2009.

"We have beaten all consensus forecast with the good number for the December quarter despite a massive 84.02 per cent voluntary hike in provisioning for bad loans at Rs 1,797
crore for Q3, taking our total bad loan provisioning to Rs 5,528 crore to enable the bank reach a PCR of 64.07 per cent," Bhatt told reporters at the bank headquarters here.

The consensus forecast for the bank's numbers was a 10-11 per cent rise in profit. Analysts were also worried that the bank might again report higher bad loans this quarter.

SBI, along with its associates, controls a quarter of the domestic bank loans and deposits, saw its net interest income zooming by 43.28 per cent to Rs 9,050 crore compared to Rs
6,316 crore in the year-ago period.

The bank also saw its net interest margin, which indicates performance of bank's investment, rising by 84 basis points to 3.40 per cent and a robust 24.35 per cent jump in
interest income.

An impressive jump in bank credit offtake also helped SBI beat forecasts. Credit grew by 24.4 per cent in Q3, according to the central bank data.

SBI Deputy MD & CFO Hemant Contractor, however, was not sure if the bank can maintain an over 20 per cent growth in credit offtake in the fourth quarter.

He said there has been strong demand from oil companies since December as crude prices have been on an upward spiral.

The SBI counter, valued at USD 35 billion, rose 2.5 per cent on Friday on expectation of better Q3 numbers to Rs 2,597.95, on a day when the Sensex dropped 0.2 per cent. MORE
Net NPAs were down at 1.61 per cent against 1.88 per cent year-on-year, while provision coverage ratio (PCR) increased to 64.07 per cent.

The capital adequacy ratio of the bank stood at 13.16 per cent at the end of the reporting quarter. SBI also saw its cost of funds coming down by 639 basis points, or 6.39 percentage points, during the quarter.

Gross advances grew by 21.88 per cent to Rs 73,9,971 crore, while loan growth saw a rise of 74 per cent to Rs 46,747 crore. Interest income on advances rose by 24.35 per cent during the reporting quarter against a decline of 1.54 per cent in the year-ago quarter.

Interest income from resource operations rose 12.56 per cent due to increase in interest earned on investments, which jumped 16.32 per cent. Net interest income stood at Rs 9,050 crore versus Rs 6,316.3 crore. SBI saw its total provisions go
up to Rs 2,051 crore versus Rs 857 crore.

Growth in interest expenses on deposits was contained at 3.22 per cent during the quarter due to robust growth in Casa deposits which rose 27.71 per cent. The Casa (current
account and savings accounts) ratio increased 523 basis points from 42.94 per cent in Q3 FY10 to 48.17 per cent in Q3.

While cumulative NIM improved significantly by 84 bps to 3.40 per cent, from 2.56 per cent as at the end of December 09, it improved by 74 bps from 2.66 per cent in March 10.

Fee income went up by 13.12 per cent in Q3 FY11. Due to change in accounting, net ATM interchange fee of Rs 222 crore for the entire nine-month period was added to fee income in
Q3 FY10. Adjusting on pro-rata basis, year-on-year growth in fee income stood at 21.32 per cent for Q3.