SBI Q3 Review - Asset Quality Outlook Encouraging; Earnings Set To Gain Pace: Motilal Oswal
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Motilal Oswal Report
State Bank of India reported strong performance, with healthy net interest income growth (excluding one-time interest recovery during Q3 FY20) and strong recovery in retail credit growth.
On the asset quality front, controlled pro forma slippages (Rs 20.7 billion) and low restructuring request (0.8% of loans) underscores an encouraging asset quality outlook.
Pro forma gross non-performing asset/net non-performing asset ratio stood at 5.44%/1.81% (versus 5.88%/2.08% in Q2 FY21).
We believe the earnings normalization cycle for the bank has begun as the uncertainty ushered by Covid-19 has receded significantly.
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