MUMBAI/BENGALURU (Reuters) – State Bank of India said on Friday its quarterly net profit had risen by 327% to 35.81 billion rupees ($474 million) after a one-off gain from the sale of its stake in SBI Cards and Payment Services, lifting its shares by as much as 9%.

India’s biggest bank said that although gross bad loans as a percentage of total loans improved in the three months to the end of March, it had nevertheless set aside more funds in preparation for defaults, like other lenders looking to shield themselves from the coronavirus crisis.

Mumbai-based SBI, which has more than 22,000 branches, said in a regulatory filing that while asset quality improved on the previous quarter, provisions for bad debt jumped by 45%.

SBI expects muted loan growth of around 7.5% in the financial year ended 2021, down from an earlier 12% forecast, its chairman Rajnish Kumar said.

Kumar said on a conference call he expects loan recovery to pick up from the September quarter, adding that if things go well SBI may repeat the performance of its 2020 financial year, when it made a record 144.88 billion rupee profit.

However, Kumar warned that in a worst case scenario SBI’s performance may mirror that of 2018, when it posted a 65.48 billion rupee loss.

SBI said only 21.8% of its customer base has so far used a loan moratorium, which runs until August.

“The number of people that opted for (the) moratorium was fewer than perceived. SBI also has good provision coverage, has gained market share and doesn’t need capital as of now, which may have cheered investors,” Saurabh Jain, assistant vice president research at SMC Global Securities, said.

Before the results SBI shares had fallen 48% this year, versus a near 18% drop on the benchmark Nifty 50 index.

($1 = 75.5430 rupees)