State Bank of India, the country's largest lender, expects at least 30 billion rupees of bad loans from mid-corporates and small and medium enterprises to become "standard" in the next two quarters, its chairman said.
The bank also expects the farm sector's non-performing loans to improve in the September quarter on the back of regular payments and recoveries, Chairman Pratip Chaudhuri said on Friday.
The state-owned lender posted a surge in net profit for the second straight quarter on strong loans growth, beating market expectations, but a rise in bad loans pulled its shares down.
SBI's net profit more than doubled to 37.52 billion rupees from a year earlier. Analysts on average had expected a net profit of 36.17 billion rupees.