State Bank of India 3QFY2016 Results: Angel Broking

Views of Mr. Vaibhav Agrawal (VP Research - Banking, Angel Broking) on State Bank of India 3QFY2016 Results:

"SBI's Q3FY16 reported PAT of INR 1,115 cr, in line with our expectations. Though this is a decline of 61.7% YoY and 71.2% QoQ, given the cleaning up exercise the bank is taking up towards NPAs and taking higher provision this can be taken as positive. Fresh slippages for the quarter came in at INR 20,692cr as against INR 5,875cr for 2QFY2016. Part of the rise in slippages can be attributed to the accounts coming from RBI's identified corporate which are under stress. Banks were directed by RBI to recognise these accounts as NPAs by March, 2016 and since SBI has not recognised all of them, equal amount of slippages can be expected in 4QFY16. Asset quality deteriorated during the quarter which is on expected line. Gross NPAs ratio went up to 5.10% vs 4.15% in 2QFY16 and Net NPA went up to 2.89% from 2.14% QoQ. There was 82% rise in provisions due to higher NPA recognition. However, given the size of the balance sheet, SBI has fared well compared to other PSU banks. The bank certainly will need capital for meeting future growth; again on this count also it stands better than other PSU banks. Though stress is likely to persist in the system SBI is better positioned to meet the challenges given its decent capital adequacy of 12.45%. Hence, we have an ACCUMULATE Rating on the stock."

Shares of STATE BANK OF INDIA was last trading in BSE at Rs.154.95 as compared to the previous close of Rs. 154.2. The total number of shares traded during the day was 5166258 in over 44179 trades.

The stock hit an intraday high of Rs. 157.6 and intraday low of 148.3. The net turnover during the day was Rs. 787024908.

Source : Equity Bulls

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