Yet, analysts were confused and concerned over asset quality going ahead. “The bank has left (investors) in confusion as far as its moratorium book is concerned, which is different from other banks,” said an analyst from a domestic brokerage who, however, assumed the moratorium book in value terms to be lower.
Lalitabh Srivastawa, vice-president at Sharekhan, said while the good profile of retail customers and lower moratorium in corporate book offer comfort, asset quality trend is a key monitorable.
Second, the management was positive on loan book growth in FY21, which it believed would help negate the impact of lower fees and other income. Here too, a few analysts expect its key operating metrics to remain muted due to the economic slowdown.
In Q4, with about a week's business lost, SBI’s advances rose by just 5 per cent year-on-year. This, along with lower interest rates, led to flat growth in net interest income to Rs 22,767 crore, which was 10 per cent lower than the consensus estimate. Profit before tax jumped by 11 times to Rs 4,970 crore, largely supported by a one-time gain from stake sale in SBI Cards. Even then, it was 34 per cent below estimates of Rs 7,496 crore.
Thanks to the moratorium, slippages or loans turning bad drifted down to 2.16 per cent of advances in Q4, from 2.42 per cent in Q3FY20, but were up 56 basis point year-on-year. This improved gross non-performing assets by 79 basis points, sequentially to 6.15 per cent.
Against this backdrop, investors should wait for clarity on moratorium and asset quality.
A key comforting factor, however, is that the market value of its subsidiaries/investments, put together, is nearly equal to SBI's market capitalisation.