To Understand this PPT : https://youtu.be/S2RIYxq0jpY State Bank of India Q1 Result FY 2021| SBI Bank Share Latest News| SBI Share complete Analysis

1. BEAT
THE
STREET

2. SBI Q1 Results
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Profit
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PSU Bank

3. In This Video
• Earning for the Q1 of SBI
• Management Comments
• Govt bank Recapitalisation Plan
• SBI vs HDFC Bank
• Beat The Street Outlook

4. Earnings
• State Bank of India’s quarterly profit surged, owing to a fall in provisions
and an exceptional gain. Net profit of India's largest lender rose 81% year-
on-year to Rs 4,189 crore in the three months ended June. This includes an
exceptional gain worth Rs 1,540 crore due to sale of investments in SBI Life
Insurance Co. Ltd. Vs Estimated 3370 Crore
• The state-owned lender's net interest income, or core income, also rose
16% over the year ago to Rs 26,641 crore. Vs Estimated 24356 cr.
• SBI’s bad loan provisions fell 19% year-on-year to Rs 9,420 crore. Provisions
against non-performing assets in the quarter ended March stood at Rs
11,894 crore. This comes when most banks are raising provisions to
safeguard their balance sheets against the Covid-19 pandemic—which
froze economic activity—and risk of defaults after the loan moratorium
ends on Aug. 31.

5. Earnings
• SBI made Covid-related provisions worth Rs 1,836 crore in the first quarter. Its
total provisions against Covid-related losses now stand at Rs 3,008 crore. The
state-owned lender's asset quality improved during the quarter. Vs Estimated
asset quality disquiet is likely to remain unresolved even as share of moratorium
loans is likely to moderate from 15%-50% to 10%-30% of loans.
• As a ratio of total advances, gross bad loans contracted to 5.44% from 6.15% in
the preceding three months.
• Net NPA ratio stood at 1.88% against 2.23% in the quarter ended March.
• In the quarter ended June, the bank recorded fresh slippages worth Rs 3,637
crore, lower than Rs 8,105-crore-worth slippages reported during January-March
and Rs 16,212 crore a year ago. Recoveries and upgrades during the first quarter
stood at Rs 4,056 crore, the bank said.

6. Loan Under Moratorium
• Of the Rs 16-lakh-crore worth of term loans, 9.5% is under moratorium as
allowed by the Reserve Bank of India. These are the accounts where
borrowers have paid less than two monthly installments since March. Most
accounts under moratorium belong to corporate borrowers and the bank
expects them to start paying normally from September, Kumar said.
• The SBI chairman said Rs 42,000 crore worth loans were classified as
special mention accounts as on March 1. These are the accounts where
borrowers have not repaid their loans on the due date, but the account is
still performing. Of these special mention accounts, only Rs 13,000 crore
worth loans have seen one or less installment paid till June.

7. Kumar take on that:
• “This shows that without the moratorium, our gross NPA would have
gone up by only Rs 13,000 crore by June. We, however, expect that
more of these borrowers will pay regularly once the moratorium lifts,”
Kumar said.

8. Advances & Deposits
• SBI's outstanding advances rose 6.58% year-on-year to Rs 23.85 lakh crore
as on June 30. Deposits rose 16% from a year ago to Rs 34.2 lakh crore. The
growth in advances was mainly aided by retail advances and foreign office
advances, which rose 12.85% and 11.19% year-on-year, respectively. “We
are currently sitting on nearly Rs 1 lakh crore worth sanctions pipeline in
our project finance business.
• As these disbursements happen, we will be able to deploy more of the
liquidity we have garnered through deposits. We are certain that other
segments will also show signs of credit demand in the coming months,”
Kumar said. Shares of SBI rose as much as 4.1% to Rs 194.25 apiece after
the results were announced, compared with a 0.5% drop in the benchmark
Nifty 50 Index.

9. Chairman Rajnish Kumar on Results
• It is safe to presume that as on June 30, SBI is declared as asymptomatic
and has built good immunity," Kumar said referring to bank’s preparedness
to absorb the losses arising from the impact of the pandemic. “But that is
not a guarantee on what will happen in future,” he added.
• From September onwards, Kumar hopes that corporate accounts will start
repaying normally. The bank has set aside as COVID provisions on Rs 1,041
crore of home and home-related loans and less than Rs 400 crore each in
personal and SME loans.
• Kumar is no big fan of a moratorium extension beyond August. “Most
bankers, including myself, believe there is no need for moratorium beyond
August 31,” he said.
• But COVID can be an unpredictable villain in the story.

10. Govt Recapitalisation Plan for
• The economic impact of the pandemic—due to the lockdown and
anticipated post-lockdown compression in economic growth—may result in
higher non-performing assets and capital erosion of banks. A
recapitalisation plan for PSBs (public sector) and private banks has,
therefore, become necessary,” the RBI governor said.
• State Bank of India (SBI) will raise Rs 25,000 crore capital through
additional tier-1 (AT1) and tier-II bonds from the market in FY21. This
capital is expected to strengthen capacity to grow business and create
buffers to withstand shocks.
• It will raise AT1 and tier-II capital by way of issuance of Basel III-compliant
debt instruments in dollars and domestic currency in the current financial
year. SBI, in an exchange filing, said its board had given nod to raise fresh
AT1 capital upto Rs 4,000 crore subject to the Centre’s concurrence. Its
directors also gave nod to raise fresh tier-II capital up to Rs 10,000 crore.

11. SBI vs HDFC Bank
SBI Bank : PSU Bank
• Net profit rose by 81% YoY
• NII rose by 16% YoY
• Provisioning fall by 19%
• Deposit grew by 16% YoY
• Advances grew by 6.58%
• GNPA – 5.4% NNPA- 1.88%
• 9.5% Loan under moratorium
HDFC Bank : Biggest Pvt sector Bank
• Net profit rose by 21%
• NII rose only 10.8% YoY
• Provisioning rose by 0.03%
• Deposits rose by 24.6% YoY
• Advances grew by 20%
• GNPA – 1.36%, NNPA – 0.33%
• 9% loan under moratorium

12. Beat The Street Outlook
• Growth in Quarterly Net Profit with increasing Profit Margin (YoY)
• Growth in Net Profit with increasing Profit Margin (QoQ)
• Company with Zero Promoter Pledge
• Brokers upgraded recommendation or target price in the past three
months
• Decrease in Provision in recent results
• Already trading at very Lower than its fair value
• Target Price – Rs 250 till year end 2020

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