SBI Q1 Review - Strong Recoveries To Drive Earnings: Centrum Broking
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Centrum Broking Report
State Bank of India's earnings were healthy on asset quality.
Net interest income was a miss due to interest reversals, lower loan-to-deposit and unutilised credit.
Treasury income was higher while advance under collection account recovery was a beat (included a large aviation account of Rs 16.9 billion), which coupled with lower opex led to a pre provision operating profit beat.
Although SBI's net slippages were more driven by small and medium enterprise/retail, 30% were recouped in the quarter also indicated by lower non performing asset provisions.
This trend continued in July which saw good recoveries. June/July collection efficiency improved to 92/94%.
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