State Bank of India posts lower Q3 profits

23 January 2007

India's largest lender, the State Bank of India, has reported a decline in third quarter profits, blaming bad loans and increased operating costs.

Net profits for the final quarter of 2006 were down 4.5 per cent to $241 million, according to the bank - lower than the profits predicted by many banking analysts.

Operating profits for the quarter rose by 9.8 per cent compared with the same period last year.

Profits also took a knock from a required doubling of its provisions for bad loans and other contingencies.

India's central bank also ordered more cash to be set aside in order to help contain inflation.

State Bank of India, which is partly state-owned, is the country's biggest financial institution with more than 9,000 branches, serving 100 million customers.

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