Target: ₹700
CMP: ₹567.40
State Bank of India’s (SBIN) FY23 annual report highlights that the bank is steadily strengthening its balance sheet and consistently delivering healthy RoE while maintaining its leadership position.
The bank continues to focus on building a superior loan book, as evident in a steady decline in stressed assets, improving PCR and robust loan growth (17 per cent in FY23). The Retail segment reported a 2.5x jump in PBT after the Corporate segment showed a 5x increase in PBT in FY22. SBIN has delivered an earnings CAGR of 51 per cent over FY20-23 and crossed a key milestone of INR500b of profits in FY23.
On the digital front, YONO continued to set new records with about 143 million downloads and about 60 million registered users, along with average daily logins of about 10.3 million.
SBIN sanctioned 1.39m digital loans worth ₹24,300 crore and opened 64 per cent of savings accounts through YONO in FY23.
SBIN reported further improvement in asset quality, with PCR improving to 76 per cent (98.6 per cent on the corporate book) in FY23. Controlled restructuring (0.8 per cent), low SMA pool (10bp) and 100 per cent coverage on SR portfolio provide comfort and would keep credit costs under control. We reiterate Buy with a TP of ₹700.