On Wednesday, State Bank of India (SBIN:IN) maintained a positive outlook with a reiterated Long (1) rating and an INR900.00 price target by an analyst from Equirus. The bank showcased a robust financial year 2024, marking the sixth consecutive year of Return on Assets (RoA) expansion, reaching 1.04% despite one-time employee expenses. The cost-to-income (C/I) ratio was reported at 59%, compared to 54% the previous year.
The bank's provisions remained low, averaging around 8 basis points compared to 31 basis points year-over-year. State Bank of India has been actively pursuing key initiatives across various loan verticals. In the retail sector, which comprises 36% of gross advances, the bank has been focusing on strategic partnerships with builders and automotive original equipment manufacturers to improve turnaround times and has increased loan limits for pre-approved personal loans.
In the small and medium-sized enterprise (SME) segment, which accounts for 12% of gross advances, the bank has introduced a Business Rule Engine to streamline the processing of micro, small, and medium enterprise (MSME) loans using data such as GST returns, income tax returns, and bank statements. For the agricultural sector, which represents 8% of gross advances, efforts are underway to replace the existing loan processing technology stack to expedite processing times.
The bank has also made significant advancements in its IT infrastructure. The development of the Outsourcing Lifecycle Management System (OLMS) aims to mitigate agency risks, enhance the tracking of service level agreements, and improve cost efficiency. Additionally, enterprise integration services have been employed to reduce the development time for third-party applications, further streamlining the bank's operations and service delivery.
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