SBI warns bad debt can worsen even as its profit beats estimates

SBI, which accounts for more than a fifth of loans in India's banking sector, is a key indicator of the health of the country's economy that's set for a historic contraction this financial year

State Bank of India warned that the ongoing coronavirus pandemic would lead to more bad debt, even as the nation’s largest lender reported better-than-expected profit after setting aside fewer provisions for problem loans.

The bank’s net income jumped 52% to 45.7 billion rupees ($610 million) for the three months to September, beating the 36.9 billion rupee average estimate of 11 analysts surveyed by Bloomberg.

While its bad loan ratio fell slightly to 5.28%, from 5.44% at the end of June, SBI expects a further 200 billion rupees of loans to sour over the next six months as the pandemic continues to impacts