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Systematix Report
State Bank of India witnessed couple of one-offs in Q2 FY22 results in terms of full provision of family pension liabilities, recognition and provision for SREI loan exposure and partial NPA recovery and write-off of DHFL loan exposure post partial recovery.
The bank's fresh gross delinquency rate at 76 bps was quite low and excluding SREI loan reclassification gross delinquency was at 28 bps. It's notable that the bank's restructured loan book doubled to 151bps (from 76 bps in Q1 FY22).
We need to monitor delinquency rate in H2 FY22 as the restructuring window would be shut. On core performance, the bank's margin improved with lower net delinquency and interest income reversals and interest income on income tax refunds. Core fee income growth remained muted with 2.8% YoY as the balance sheet expansion was still low. Domestic loan book grew at 4.6% YoY below banking industry run-rate.
From hereon we need to monitor progress in core earnings and balance-sheet expansion.
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