Mumbai, Aug 10: India's largest lender, State Bank of India (SBI) reported 137% on-year growth in its net profit for the April-June quarter of fiscal 2012-13 at Rs 37.52 billion, against Rs 15.83 billion in corresponding quarter in a year-ago period. 

The bank's profit surged on strong loan growth but a rise in bad loans pulled its shares down 4.26% to Rs 1887.95 on BSE Friday. 

The government-owned SBI, which account for 70 percent of the market in India, reported non-performing loans rise by nearly 5% at June-end from 3.5% a year ago. Net NPA rose to 2.22% from 1.82% quarter-on-year. However, the bank's provisions for bad loans were down 41% to Rs 25.6 billion. 

SBI's total income for the Q1 rose 16.89% to Rs 324.15 billion from Rs 277.32 billion for the quarter ended June 30, 2011. 

The bank's net interest income (NIM)--the difference between interest earned and interest expended-- rose 14.6% to Rs 111.19 billion. The bank’s operating income rose 10.5% on-year and operating profit 13%.

Earlier in March quarter SBI, in which the government owns about a 60% stake, had reported an improvement in its bad debts. 

SBI’s overall credit grew 20% on-year to Rs 9.46 trillion, of which loans to the agriculture sector jumped 26% to Rs 1.2 trillion. Weak monsoon can be a alarm bell for the bank.

The bank said its average cost of deposits rose 58 basis points to 6.24% from 5.66% last year, while yield on its loan improved by only 43 basis points to 10.86%.

Net profit of associate banks rose 28%, and SBI Life Insurance reported a net profit of Rs 1.63 billion.