What is your first take on SBI this quarter?
The numbers seem to be quite in line with expectations. Two things I noticed are that the employee cost is up on a sequential basis. That was in a way anticipated. And second, the treasury profits are also slightly lower. So these two aspects are the ones which were expected and brought the results in line. Otherwise, the big takeaway is that the asset quality has remained static.There seems to be a slip as far as advances are concerned while deposits seem to be okay. As far as the asset quality is concerned, it was not that it was a big worry for the market but there is a definite improvement. Given the RBI has been warning about unsecured loans, for now, there does not seem to be any pressure as far as the numbers of SBI are concerned. What is your take?
At least the headline numbers of NPA tell us that there does not seem to be any worry. We will have to look at the granularity in terms of what are the slippages and what are the upgrades. Possibly the upgrades would have been better this time around relative to the other quarters. I will have to look at this and then take an assessment.
In terms of the stock moves, do you see that these earnings are anything that would spur a fresh round of rally in the stock price of SBI?
In the last one year, SBI stock has, if I am right, delivered just about 1% negative return. So that means that it is virtually flat. But in this one year, the bank has added something close to 70 rupees as EPS, incrementally. So in a one-year span, the EPS added is 70 rupees to the book but the price has virtually remained unmoved. It is just 3 rupees down. It remains to be seen what the investors will likely look at going ahead because to me this 70 rupee EPS accretion versus 3 rupees stock price reduction in one year is an unfair treatment of the stock.What is your view on the retail book of SBI?
Since we are talking about the retail number, the only hint that one can gauge into right now based on the numbers is that the segmental result shows that the retail banking number in terms of profits is virtually 10,700 crores, static quarter-on-quarter. For now, nothing tells us that there is incremental stress getting built up in the retail book as of now.
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