In today’s intraday session, shares of State Bank of India (SBI), the biggest public sector bank in the country, jumped 3.80% to an all-time high of ₹675 apiece. As a result, the bank’s market capitalization surpassed ₹6 lakh crore, making it the second PSU enterprise to do so, after Life Insurance Corporation.
January 2021 saw the bank surpass the five lakh crore rupee threshold.
For its home loan customers, SBI has started the festive bonanza in honor of this milestone and to kick off the celebrations. SBI will grant a concession of up to 0.25 percent on home loans, 0.15 percent on top-up loans, and 0.30 percent on loans secured by real estate as part of the holiday bonanza.
A further cherry on top, the bank is waiving the processing fees for house loans through January 31, 2023. The offers have been carefully chosen with the various needs of customers in mind from various categories. SBI continuously works to provide consumers who aspire to home ownership with convenient access to affordable housing.
The Bombay Stock Exchange (BSE) website states that the market capitalization of at least eight companies exceeds ₹6 lakh crore. With a market valuation of ₹19.32 lakh crore, Reliance Industries, led by Mukesh Ambani, is the largest, followed by TCS at ₹15.12 lakh crore and HDFC Bank at ₹10.96 lakh crore.
PSU bank stocks saw a one-way spike following the interim Budget 2024–2025 when Finance Minister Nirmala Sitharaman surprised analysts by announcing that gross and net market borrowing for FY25 would be ₹14.13 lakh crore and ₹11.75 lakh crore, respectively. Analysts had been expecting gross market borrowings to be slightly over ₹15 lakh crore.
Indian bond yields significantly declined as a result of this development, which is expected to strengthen PSU banks’ Treasury portfolios—they own more government bonds than private sector banks.
The expectation that the Reserve Bank of India (RBI) will likely again impose a pause on the repo rate during its February Monetary Policy Committee (MPC) review meeting is another positive factor driving the rally in PSU banks.
Additionally, the budget’s increase in capital expenditure along with the expected increase in corporate lending activity will help PSU banking stocks rise in value. Due to higher wage provisions and soft other income, SBI reported a 35.50% YoY decline in standalone net profit for the quarter that ended in December, coming in at ₹9,164 crore.
According to a regulatory filing, the bank’s total income increased to ₹1,18,193 crore in the third quarter of the current fiscal year from ₹98,084 crore in the same period the previous year.In comparison to ₹86,616 crore during the same period last year, the bank earned interest income of ₹1,06,734 crore during the quarter.
In a similar vein, net non-performing assets (NPAs) decreased to 0.64 percent at the end of the same period last year from 0.77 percent. SBI Group’s net profit decreased by 29% to ₹11,064 crore on a consolidated basis from ₹15,477 crore in the same quarter last year.
SBIN made ₹6,300 crore in wage-related provisions in the third quarter (a 17% pay increase). Wage-related provisions were ₹12,720 crore for 9MFY24. The bank projects lower wage provisions of ₹5,400 crore for Q4FY24. Additionally, it set aside ₹240 crore for its exposure to AIF.
Consequently, Pre-Provision Operating Profit (PPoP) experienced a 19% YoY decline to ₹20,300 crore, while Core PPoP saw a 20% YoY decline. Furthermore, a one-time item totaling ₹7,100 crore was recorded in Q3 as a result of a differential pension at 40% or 50%, even though this order was still pending from 2002.
Given the inevitable nature of this event, the bank set aside ₹5,400 crore in addition to ₹1,700 crore for the neutralization of DA relief for retirees and family pensioners who retired prior to November 2002.
