STATE BANK OF INDIA to Invest only Indian Bank

The only Indian Bank to find place in the Fortune Global 500 List (2008), going up from the 495^th spot last year to 380^th place, SBI is a banking stock, enjoying immense fancy amongst the investors. The sheer size and reach of the bank is so large that for any new generation bank, to even think of making it to half a mark as SBI would be an achievement in itself.

SBI, as a stock has been seeing some volatile movements over the past few days. When the financial crisis broke out in USA, like all banking stocks, SBI too lost a lot of ground. But once the Finance Minister categorically stated that public sector banks have no or minimal exposure to this crisis, SBI, from the biggest loser became the biggest gainer.

Financially, it has been doing well. For the first quarter ended 30^th June 2008, the total income earned by the bank rose 26% at Rs.23747.43 crore. Its total expenses rose 20% at Rs.18578.47 crore. Its expenses on employees rose by 3.6% at Rs.2873.78 crore. The total interest expended rose 29% at Rs.13509.926 crore. The bank made a 12% lower tax provision and this helped stem the fall of profit after tax, which was down 12% at Rs.1640.92 crore.

Deposits were up by 25% at Rs.1,12,197 crore. Gross advances rose 30% at Rs.1,03,493 crore. Mid corporate advances grew by 30.79 % (YOY); SME advances grew by 23.16 % (YOY); Agriculture advances grew at 9.39 % (YOY); Home loans grew by 17.40 %, auto loans by 41.31 % and education loans by 45.89 %.(YOY). Its international advances were up by 46.17% (YOY).

Gross NPA ratio is 2.54 % as on June 2008 (3.30% as on June 2007). Net NPA ratio is 1.42% as on June 2008 (1.62 % in June 2007). There has been a write back of Rs 247.40 crore towards loan loss provisions in Q1FY09 against an additional provision of Rs 506.33 crore in Q1FY08. The Provision Cover is at 44.79 % as on June 2008 (51.63 % in June 2007).

Capital Adequacy Ratio of the Bank as on 30.06.2008 is 12.99 % and Tier I CAR is 9.25 % as per Basel I. (CAR and Tier I as on 30.06.2007 was 13.13% and 8.32%).

SBI is the largest bank, it has currently got a network of 10,800 branches and if we take in all the associates and the entire group, the tally goes up to 16,800 branches. In terms of sheer reach, it is way ahead of others, giving it the edge over all others. It continues to remain the trusted bank in rural India. The only concern which all on the street have is the impact of the various Govt’s largesse’s being doled out. Yet, it remains a hot favourite amongst the discerning investors. So stay invested.
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