State Bank of India (SBI) missed street expectations on Friday with the third quarter profit rising 30.3 percent year-on-year to Rs 2,910 crore. The profit was impacted by higher provisions but was supported by other income and operating profit. However, the improvement in asset quality drove the stock higher by 6 percent. Net interest income of the public sector lender rose 9 percent to Rs 13,777 crore during October-December quarter from Rs 12,640 crore in the year-ago period, which was slightly better than expectations. Net interest income is the difference between interest earned and interest expended. According to a CNBC-TV18 poll, profit was expected at Rs 3,254 crore and net interest income of Rs 13,654 crore for the quarter. SBI says advances grew 7.3 percent on yearly basis to Rs 12.33 lakh crore while deposits jumped 11.9 percent to Rs 15.1 lakh crore during the quarter. Other income (non-interest income) jumped 24.3 percent year-on-year to Rs 5,237.80 crore and operating profit grew 22 percent to Rs 9,294.5 crore in December quarter. Provisions for bad loans increased 26 percent year-on-year (up 22.5 percent sequentially) to Rs 5,235 crore in the quarter gone by. SBI says (out of total provisions) provisions for non-performing assets shot up 37.6 percent Y-o-Y (up 17 percent sequentially) to Rs 4,717 crore during the quarter, adding provision coverage ratio was 63.56 percent as on December 31, 2014. The biggest positive factor in earnings was the improvement in its asset quality. Gross non-performing assets (NPA) stood at 4.90 percent of gross advances in Q3FY15 against 4.89 percent in previous quarter and 5.73 percent in the year-ago period. Net NPA was 2.80 percent during the quarter, increased from 2.73 percent in Q2FY15 but declined from 3.24 percent in corresponding quarter of last fiscal. In abosolute term, gross NPA fell 8.6 percent (up 2.1 percent sequentially) to Rs 61,991 crore on yearly basis. Net NPA also declined 7.3 percent year-on-year to Rs 34,469 crore in Q3FY15 but up 4.5 percent on sequential basis. Fresh slippages in Q3FY15 dropped sequentially to Rs 7,043 crore from Rs 7,700 crore while fresh restructuring was Rs 2,580 crore during October-December quarter, declined compared to Rs 3,448 crore in previous quarter. Recoveries and upgrades for the quarter were Rs 667 crore while the bank’s write-offs stood at Rs 5,096 crore in Q3 against Rs 4,787 crore in September quarter. Capital adequacy ratio (as per Basel III norms) stood at 12.03 percent in December quarter against 12.33 percent in previous quarter and 11.59 percent in the year-ago period. Total expenses of the India’s biggest lender in Q3 increased 9.7 percent to 34,489.51 crore compared to a year-ago period while operating expenses rose 5.5 percent to Rs 9,720 crore during the same period due to higher other operating expenses. However, employee cost declined marginally to Rs 5,842 crore from Rs 5867 crore on yearly basis. At 12:36 hours IST, the scrip of State Bank of India was quoting at Rs 300.25, up Rs 15.85, or 5.57 percent amid high volumes on the BSE.