State Bank of India's net profit rises 8% in July-September

MUMBAI, Nov 4 (Reuters) - State Bank of India (SBI.NS), the countrys largest lender, reported an 8% increase in net profit for the July-September quarter on Saturday, helped by healthy core lending income and robust loan growth.

The state-run lenders net profit rose to 143.30 billion rupees ($1.72 billion) in its fiscal second quarter, from 132.65 billion rupees a year ago.

That was slightly higher than analysts estimate of 141.83 billion rupees, according to LSEG data.

Net interest income - the difference between a banks interest earned and paid - rose 12.3% to 395 billion rupees from 351.83 billion rupees a year ago.

Net interest margin - a key gauge of lenders profitability - shrank to 3.43%, compared with 3.55% a year ago, and 3.47% in the prior quarter.

SBIs loans grew by 12.4% year-on-year, while deposits grew 11.9%.

Indian banks have consistently clocked double-digit loan growth over the past few months due to rising demand for credit, aided by increased consumer spending.

The ongoing festive season is expected to further boost customer spending, helping sustain the demand for retail loans.

SBIs gross non-performing assets (NPA) ratio was at 2.55% as of end-September, compared with 2.76% at the end of June.

Its net NPA ratio stood at 0.64% at the end of the quarter, compared with 0.71% at the end of the prior quarter.

($1 = 83.1400 Indian rupees)