SBI Q4 Results Review - SBI Has Answers For Capital, ECL Questions: Yes Securities

Management stated that the bank does not have to grow deposits at a very fast pace.

<div class="paragraphs"><p>State Bank of India headquarters, Nariman Point, Mumbai.&nbsp;(Photo: BQ Prime)</p></div>
State Bank of India headquarters, Nariman Point, Mumbai. (Photo: BQ Prime)

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Yes Securities Report

State Bank of India's management alluded to expected credit loss speculation being futile at this stage but assessed that, if implemented, the impact could be absorbed:

SBI is carrying non-NPA provisions and, in the bank’s assessment, the incremental ECL provision impact would be much below this number, presumably, the non-NPA provision number of Rs 355.75 billion stated on the presentation and that too, the said impact would be spread over five years.

Management averred that the current capital provides sufficient headroom for normal growth:

The CET1 ratio improved from 9.94% as of March 2022 to 10.27% as of March 2023 and the bank has, thus, been able to plough back profits and accrete capital. SBI's current capital adequacy is sufficient to support Rs 7.1 trillion of loan growth without equity capital raise.

Management guided for a loan growth of 12-14% in FY24:

Regarding the international business, management explained that there will be huge manufacturing export happening from India. Hence, SBI’s focus on global presence is more of a strategic move to capture that prospective opportunity.

Click on the attachment to read the full report:

Yes Securities State Bank of India Q4FY23.pdf
SBI Q4 Results Review - Earnings Surpass The Rs 500 Billion Milestone; Outlook Positive: Motilal Oswal


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