Below is the Quote on 1QFY21 results of SBI Ltd. By Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking Ltd
For Q1FY21 State bank of India has reported above estimated numbers on NII and PAT front. NII grew at 16% and advance grew at 6.6% YoY. Domestic NIM Improved 30bps sequentially to 3.24%, which helped NII growth. Healthy NII growth and contained opex have helped pre-provision profit (PPOP) to report growth of 36%. Strong PPOP and stake sale supported PAT improvement.
On the moratorium front, it has improved, however, the detail will be closely watched by investor on investor call. SBI’s moratorium has decreased to 9.5% of term loan book Vs 23% in the previous quarter. Out of 9.5% moratorium, 2% claimed by ‘AA’ & ‘AAA’ rated companies for preserving cash, 4.2% claimed by retail & 3.3% claimed by private corps. It is in line with other private banks which is positive. Bank has taken a total COVID related provision worth of Rs.3000cr, which we believe is a bit less compared to advance size.
On the Liability front to the bank did well, Deposit grew 16%/5.5% YoY/QoQ. Domestic CASA deposit grew 16.69% /6.22% YoY/QoQ and CASA improved 18bps sequentially to 45.35%.
The overall bank has reported a decent set of numbers and currently in trades much below its historical valuation. Considering inexpensive valuation and strong subsidiary performance we have a positive view on SBI Bank.
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