CLSA on SBI ; O-P, TP Rs 1325

Delivered a 2% NII beat versus our estimates, driven by an 11bp QoQ domestic NIM expansion. Lower fee income and treasury losses led to a 3% PBT miss. Domestic loans growth, at 17% YoY, was broad-based, while international loans declined 3% QoQ, adjusted for FCNR deposit-backed loans. Deposit growth was healthy at 12% YoY, with 8% YoY CASA growth only soft spot. In line with sector, asset quality continued to improve, with net slippages down 10bp YoY, even off a low base. SBI should be largely unaffected by the new insurance distribution guidelines, with distribution income less than 3% of PBT.

STATE BANK OF INDIA

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