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Capitalvia Global
State Bank of India
Target ₹215
CMP: ₹191.95
The State Bank of India (SBI) offers a range of products and services for personal, business, and institutional clients. The divisions include Treasury, Corporate/Wholesale Banking, Retail Banking, and Other Banking Group, which covers all non-Banking/Joint Ventures activities other than SBI Life Insurance Co Ltd and SBI General Insurance Co Ltd.
The operating profit of the company surged 16.41 per cent. Moreover, over the past two years, SBI has shown progress in asset efficiency, with the GNPA ratio dropping from 10.9 per cent to 6.1 per cent, and fresh slippages moderating sharply to 2.2 per cent in FY20, lower when compared with many private peers. In May, RBI had announced moratorium extension till August 31, 2020 with which the probability of borrowers slipping from the bucket at the end of the moratorium will diminish as it has given more time to banks for recovering its earnings. However, the chance of disrupting the repayment pattern is equal. SBI even stated that it may witness a spike in NPAs as a result of Covid-19 in FY21. But the company has already started taking preventive steps to avoid rise bad loan spike. In order to address NPA cases more effectively the company has even formed another vertical named as SARG (Stressed Asset Resolution Group) which will concentrate on NPA recovery.
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