"NPAs have bottomed out"
-SBI's favorite quote
SBI just reported a spectacular set of results🤯🤯🤯
Have the NPAs bottomed out?🧐🧐
Is SBI regaining its lost Mojo?
A thread🧵analyzing each and every aspect of the result
Lets go👇
(1/15)
-SBI's favorite quote
SBI just reported a spectacular set of results🤯🤯🤯
Have the NPAs bottomed out?🧐🧐
Is SBI regaining its lost Mojo?
A thread🧵analyzing each and every aspect of the result
Lets go👇
(1/15)
Loan Growth:-
🏦Loans grew at about 19.93%
🏦Corporate loan growth at 18%
For many years SBI has struggled to grow!
20% loan growth from the largest bank in this country is massive!
It Bodes extremely well for the Indian economy.
(2/15)
🏦Loans grew at about 19.93%
🏦Corporate loan growth at 18%
For many years SBI has struggled to grow!
20% loan growth from the largest bank in this country is massive!
It Bodes extremely well for the Indian economy.
(2/15)
Deposit growth:-
The deposit growth at just 9.99% is a disappointment.
Makes 19% deposit growth from HDFC Bank look impressive.
Nonetheless, given the strong franchise of SBI,the deposit growth will be back
(3/15)
The deposit growth at just 9.99% is a disappointment.
Makes 19% deposit growth from HDFC Bank look impressive.
Nonetheless, given the strong franchise of SBI,the deposit growth will be back
(3/15)
Cost of funds and NIMs:-
The cost of deposits came in at 3.84%
The NIMs further expanded to 3.59%
The cost of funds is not a problem for the banks given the super-quality franchise.
(4/15)
The cost of deposits came in at 3.84%
The NIMs further expanded to 3.59%
The cost of funds is not a problem for the banks given the super-quality franchise.
(4/15)
Capital Adequacy:-
SBI has a capital adequacy of 13.51%
Tier-1 capital adequacy at 9.53%.
This is the lowest among all top banks
Given the strong loan growth,the bank will look to raise capital in the near future
(5/15)
SBI has a capital adequacy of 13.51%
Tier-1 capital adequacy at 9.53%.
This is the lowest among all top banks
Given the strong loan growth,the bank will look to raise capital in the near future
(5/15)
Asset Quality:-
🏦The Gross NPAs fell to 3.52% from 3.91%
🏦The slippages at 3000cr were down significantly.
🏦The PCR remains extremely strong at 91%
🏦The credit cost ratio came in at 0.28%(best in many quarters)
(6/15)
🏦The Gross NPAs fell to 3.52% from 3.91%
🏦The slippages at 3000cr were down significantly.
🏦The PCR remains extremely strong at 91%
🏦The credit cost ratio came in at 0.28%(best in many quarters)
(6/15)
Slippages and SMA book:-
Slippages came in at just 2399cr..Multi-quarter low.
SMA book did increase to 8497cr...however this too isn't as big to make a material impact on asset quality
(7/15)
Slippages came in at just 2399cr..Multi-quarter low.
SMA book did increase to 8497cr...however this too isn't as big to make a material impact on asset quality
(7/15)
Verdict:-
Asset quality has eased up for the bank
Covid-19 problems are now behind both bank
Slippages are at a multi-quarter low.
Bank is ready to push loan growth into the system.
(8/15)
Asset quality has eased up for the bank
Covid-19 problems are now behind both bank
Slippages are at a multi-quarter low.
Bank is ready to push loan growth into the system.
(8/15)
RoA and RoE expansion:-
For the first time in many years the RoA has gone above the 1% mark
RoE came in at a massive 16%
These are exceptional numbers from SBI.
As slippages continue to come down,the expansion of RoA and RoE is a given
(9/15)
For the first time in many years the RoA has gone above the 1% mark
RoE came in at a massive 16%
These are exceptional numbers from SBI.
As slippages continue to come down,the expansion of RoA and RoE is a given
(9/15)
Record Profits
Strong loan growth
Record low slippages
Means SBI posted a profit of nearly 14,000cr.
The best in its history.
(10/15)
Strong loan growth
Record low slippages
Means SBI posted a profit of nearly 14,000cr.
The best in its history.
(10/15)
Valuation:-
SBI is available at 1.67x P/Bx
Given the larger number of subsidiaries of SBI.
The valuation becomes even cheaper.
However the valuation is not cheap when compared with its history
(11/15)
SBI is available at 1.67x P/Bx
Given the larger number of subsidiaries of SBI.
The valuation becomes even cheaper.
However the valuation is not cheap when compared with its history
(11/15)
We are at the bottom of a credit cycle.
Credit growth is at a 50-year low.
We need strongly capitalized banks with clean balance sheets to achieve the vision of $5 trillion economy.
(12/15)
Credit growth is at a 50-year low.
We need strongly capitalized banks with clean balance sheets to achieve the vision of $5 trillion economy.
(12/15)
SBI has:-
1. Strong Balance Sheet
2. Strong Management
3. Strong capital to deploy
4. Huge physical as well as digital presence to tap growth
(13/15)
1. Strong Balance Sheet
2. Strong Management
3. Strong capital to deploy
4. Huge physical as well as digital presence to tap growth
(13/15)
The result is spectacular to say the least.
Loan growth is robust.
Asset quality is strong
And the future is bright!
(14/15)
Loan growth is robust.
Asset quality is strong
And the future is bright!
(14/15)
SBI is extremely strong and the scope of opportunity means that it can do extremely well.
Given ICICI+HDFC+SBI all have done exceptionally well
All three will lead India in the 2-3 years!
(15/15)
Given ICICI+HDFC+SBI all have done exceptionally well
All three will lead India in the 2-3 years!
(15/15)
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