SBI Q4 Review - Flagged As The Top Pick In June 2021, Investment Thesis Remains Broadly Intact: Yes Securities

Yes Securities Report

State Bank of India assuaged concerns regarding the Reserve Bank of India draft circular on project finance, while underlying asset quality outcomes remained sound:

SBI clarified that it has project loans worth Rs 1.21 trillion, while there is a three-year timeline to make provisions as per the Draft. They further added that any provisioning arising out of the Project Finance Draft is much lesser than the annual outlay arising out of ECL.

Separately, they noted that the impact from IndAS / ECL would amount to Rs 60 billion per year.

For the quarter, Gross non-performing asset additions had amounted to Rs 39.84 billion, translating to an annualised gross slippage ratio was 0.4%., while recoveries and upgrades amounted to Rs 20.52 billion.

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