State Bank of India Q1 Result FY 2021| SBI Bank Share Latest News| SBI Share complete Analysis

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State Bank of India Q1 Result FY 2021| SBI Bank Share Latest News| SBI Share complete Analysis

1. BEAT THE STREET

2. SBI Q1 Results Trending & Trading Profit Surges more than 80% NII rose by 16% Target price : 250 Huge Upside Strongest PSU Bank

3. In This Video Earning for the Q1 of SBI Management Comments Govt bank Recapitalisation Plan SBI vs HDFC Bank Beat The Street Outlook

4. Earnings State Bank of India’s quarterly profit surged, owing to a fall in provisions and an exceptional gain. Net profit of India's largest lender rose 81% year-on-year to Rs 4,189 crore in the three months ended June. This includes an exceptional gain worth Rs 1,540 crore due to sale of investments in SBI Life Insurance Co. Ltd . Vs Estimated 3370 Crore The state-owned lender's net interest income, or core income, also rose 16% over the year ago to Rs 26,641 crore . Vs Estimated 24356 cr. SBI’s bad loan provisions fell 19% year-on-year to Rs 9,420 crore . Provisions against non-performing assets in the quarter ended March stood at Rs 11,894 crore. This comes when most banks are raising provisions to safeguard their balance sheets against the Covid-19 pandemic—which froze economic activity—and risk of defaults after the loan moratorium ends on Aug. 31 .

5. Earnings SBI made Covid -related provisions worth Rs 1,836 crore in the first quarter. Its total provisions against Covid -related losses now stand at Rs 3,008 crore. The state-owned lender's asset quality improved during the quarter. Vs Estimated asset quality disquiet is likely to remain unresolved even as share of moratorium loans is likely to moderate from 15%-50% to 10%-30% of loans. As a ratio of total advances, gross bad loans contracted to 5.44% from 6.15% in the preceding three months. Net NPA ratio stood at 1.88% against 2.23% in the quarter ended March. In the quarter ended June, the bank recorded fresh slippages worth Rs 3,637 crore, lower than Rs 8,105-crore-worth slippages reported during January-March and Rs 16,212 crore a year ago. Recoveries and upgrades during the first quarter stood at Rs 4,056 crore, the bank said.

6. Loan Under Moratorium Of the Rs 16-lakh-crore worth of term loans, 9.5% is under moratorium as allowed by the Reserve Bank of India. These are the accounts where borrowers have paid less than two monthly installments since March. Most accounts under moratorium belong to corporate borrowers and the bank expects them to start paying normally from September, Kumar said . The SBI chairman said Rs 42,000 crore worth loans were classified as special mention accounts as on March 1. These are the accounts where borrowers have not repaid their loans on the due date, but the account is still performing. Of these special mention accounts, only Rs 13,000 crore worth loans have seen one or less installment paid till June .

7. Kumar take on that: “This shows that without the moratorium, our gross NPA would have gone up by only Rs 13,000 crore by June. We, however, expect that more of these borrowers will pay regularly once the moratorium lifts,” Kumar said.

8. Advances & Deposits SBI's outstanding advances rose 6.58% year-on-year to Rs 23.85 lakh crore as on June 30. Deposits rose 16% from a year ago to Rs 34.2 lakh crore. The growth in advances was mainly aided by retail advances and foreign office advances, which rose 12.85% and 11.19% year-on-year, respectively. “We are currently sitting on nearly Rs 1 lakh crore worth sanctions pipeline in our project finance business. As these disbursements happen, we will be able to deploy more of the liquidity we have garnered through deposits. We are certain that other segments will also show signs of credit demand in the coming months,” Kumar said. Shares of SBI rose as much as 4.1% to Rs 194.25 apiece after the results were announced, compared with a 0.5% drop in the benchmark Nifty 50 Index .

9. Chairman Rajnish Kumar on Results It is safe to presume that as on June 30, SBI is declared as asymptomatic and has built good immunity," Kumar said referring to bank’s preparedness to absorb the losses arising from the impact of the pandemic. “But that is not a guarantee on what will happen in future,” he added . From September onwards, Kumar hopes that corporate accounts will start repaying normally. The bank has set aside as COVID provisions on Rs 1,041 crore of home and home-related loans and less than Rs 400 crore each in personal and SME loans . Kumar is no big fan of a moratorium extension beyond August. “Most bankers, including myself, believe there is no need for moratorium beyond August 31,” he said . But COVID can be an unpredictable villain in the story.

10. Govt Recapitalisation Plan for  The economic impact of the pandemic—due to the lockdown and anticipated post-lockdown compression in economic growth—may result in higher non-performing assets and capital erosion of banks. A recapitalisation plan for PSBs (public sector) and private banks has, therefore, become necessary,” the RBI governor said . State Bank of India (SBI) will raise Rs 25,000 crore capital through additional tier-1 (AT1) and tier-II bonds from the market in FY21. This capital is expected to strengthen capacity to grow business and create buffers to withstand shocks . It will raise AT1 and tier-II capital by way of issuance of Basel III-compliant debt instruments in dollars and domestic currency in the current financial year. SBI, in an exchange filing, said its board had given nod to raise fresh AT1 capital upto Rs 4,000 crore subject to the Centre’s concurrence. Its directors also gave nod to raise fresh tier-II capital up to Rs 10,000 crore.

11. SBI vs HDFC Bank SBI Bank : PSU Bank Net profit rose by 81% YoY NII rose by 16% YoY Provisioning fall by 19% Deposit grew by 16% YoY Advances grew by 6.58% GNPA – 5.4% NNPA- 1.88% 9.5% Loan under moratorium HDFC Bank : Biggest Pvt sector Bank Net profit rose by 21% NII rose only 10.8% YoY Provisioning rose by 0.03% Deposits rose by 24.6% YoY Advances grew by 20% GNPA – 1.36%, NNPA – 0.33% 9% loan under moratorium

12. Beat The Street Outlook Growth in Quarterly Net Profit with increasing Profit Margin (YoY) Growth in Net Profit with increasing Profit Margin ( QoQ ) Company with Zero Promoter Pledge Brokers upgraded recommendation or target price in the past three months Decrease in Provision in recent results Already trading at very Lower than its fair value Target Price – Rs 250 till year end 2020

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