State Bank of India reported a record fourth-quarter profit on Thursday that beat estimates driven by strong loan demand, sending shares of the country's largest lender by assets up 3.6%.

The state-run bank's net profit rose 24% to 206.98 billion rupees ($2.48 billion) in the quarter ended March 31, beating the consensus analyst expectation of 135.65 billion rupees, as per LSEG data.

Indian banks have reported strong loan growth over the past few quarters, boosted by consumer spending amid firm economic growth.

SBI reported domestic loan growth of 16.26%, up from 14.47% in the previous quarter, with retail loans -- its biggest segment -- growing 14.68%.

Deposits growth slowed to about 11% from 12.84%.

SBI's net interest income, the difference between interest earned and paid, grew 3% to 416.55 billion rupees.

The lender's net interest margin fell 37 basis points (bps)year-on-year, but was up 13 bps from the previous quarter.

"Overall it is a strong performance with asset quality too improving. Credit growth is strong on such a large balance sheet, even better than some large private banks," said Anand Dama, who heads Banking, Financial Services and Insurance at brokerage firm Emkay Global.

Indian lenders have been grappling with tighter liquidity condition in the banking system leading to pressure on key margins, but SBI said last quarter that the bank had seen deposit rates peak.

($1 = 83.4876 Indian rupees) (Reporting by Nishit Navin in Bengaluru, additional reporting by Rama Venkat; Editing by Rashmi Aich and Nivedita Bhattacharjee)