Analysis of SBI results for the Second Quarter 2020
SBI: State of India, one of the leading Banks has declared it's quarter 2 results.
Let's try to understand how the bank performance and where can we see the price of the stock from here in the coming months.
SBI has shown a significant 52 percent year on year growth in standalone profit this quarter.
The factors that has contributed the stock to show very good returns are lower provision, tax cost, and high net interest income.
Comparing the profits with the last quarter of last year to this years last quarter, one could find a huge rise of Rs4574 comparing to last year quarter which stood at Rs 3012
Rs.4574 vs Rs.3012
Net Income Interest: The difference of Net income Earned to the Net income Expended. there is a Climb of around 14.6 percent growth in year on year basis
If we talk in value it is Rs 28181.5, the credit growth is at 6.02 percent year on year basis and Net Margin stood at 3.34 percent of the quarter.
When we talk depositaries, the deposit grew by 14.41 Year on Year basis with the current deposits raised nearly 9 percent, the saving deposit goes up by 16 percent again on year on year basis.
The above-mentioned figures or number clearly states an outstanding performance, Even the market expert failed to guess such an awesome number. In other words, it is exceeded the expectation.
The market is expecting the number to be around Rs28000 crores
"Bank has delivered a strong performance in Q2FY21 with all round improvement in profitability, capital adequacy and provision coverage ratio, including additional provision over minimum regulatory provisions required," said SBI.
If one would like to take or took at the drawback of the result would be the Non- Profit Assets. SBI confirmed that NPA still an area of concern to them.
Following the Supreme court order, the Bank has not declared any domestic loan lending
Expected the Gross NPA And Net NPA stands at around 6 and 3 respectfully
The fresh Slippage there is a slight drop is seen ..Comparing it to the past it stands at Rs2756 compare to Rs 3637reported in June 2020. While the Gross Slippage is seen as Rs3085 vs Rs3910 of the previous quarter.
Provision Coverage Ratio: 88.19 vs 86.3 comparing it to the previous year. The provision coverage ratio would be 85.25 percent if the bank had followed the IRAC norms," SBI said in its BSE filing.
The most part of this quarter went into COVID so let see how it performed, during this period more provision is added.. The pre-provision operating profit is boosted by the stake sale in SBI Life Insurance.
Currently, Dinesh Kumar Khara is newly appointed by RBI as the Managing Director.
The worries over NPA, delay in stressed accounts resolution and loan growth slowdown continued to weigh on the banking sector, especially PSU banks.
Let talk about the price movement in SBI, the stock would definitely fly hereon opening as the stock has performed or moved mostly in a sideway direction.
In the most of time the stock has shown resistance at Rs 200 if it crosses then 210-215 which is expected to be the price on opening.
The weightage of SBI in the Bank Nifty is around 11.15%.
