SBI rallies on lower slippages

Investors cheered the sharp fall in slippages for SBI in the September quarter with the stock rallying 6 per cent post results on Friday. While lower slippages and increase in provision cover are key positives, the bank is not out of the woods yet. For one, the gross non-performing assets for the bank remain elevated at 9.83 per cent of loans as of September 2017. A large bad loan book will likely keep provisioning requirements high. Two, SBI saw a sharp increase in provisioning in the September quarter which, had it not been for the profit of ₹5,436 crore on sale of its stake in SBI Life, would have led to the bank reporting losses. Three, SBI continues its weak show on the core front — its net interest income grew by 2.5 per cent y-o-y. Gross advances remained more or less flat (1 per cent growth) over the same quarter last year.

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