Motilal Oswal: State Bank Of India - Asset Quality Holding Steady  
Signage for the State Bank of India Ltd. (SBI) is seen at a branch in Mumbai, India (Photographer Dhiraj Singh/Bloomberg)

Motilal Oswal: State Bank Of India - Asset Quality Holding Steady  

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

State Bank of India is the oldest and the largest bank in India with 21,929 branches spread across the country.

It has a loan book of approximately Rs 23 trillion and deposit base of Rs 34.2 trillion as at Q1 FY21.

SBI indicated that lending is reverting to normal levels and it has witnessed higher growth since June 2020, with rural demand remaining resilient.

The Services sector has been impacted the most due to pandemic while manufacturing has faced disruptions, but is normalizing well. Agriculture, on the other hand, did not witness much disruption.

The bank is strengthening its balance sheet by creating higher provisions toward stressed accounts. It increased its provision coverage ratio (including TWO) to approximately 86% in Q1 FY21 from approximately 65% in Q1 FY18.

It holds higher provision coverage on power non-performing assets (approximately 73% PCR) than peers.

We believe that State Bank of India has prudently improved PCR over the last few years and has one of the lowest stressed assets amongst corporate banks.

Click on the attachment to read the full report:

Motilal Oswal State Bank Of India Update.pdf

DISCLAIMER

This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.