Understanding Public Sector Bank in India
Overview of Public Sector Bank
Public sector bank (PSBs) in India are government-owned financial institutions, with the government holding at least 51% of their share capital. As of December 2024, there are 12 major PSBs, including the State Bank of India, which serves a whopping 48 crore customers through 22,500 branches and 65,627 ATMs nationwide.
State Bank of India’s Performance
State Bank of India, with a market capitalization of Rs 7.22 lakh crore, saw its shares trading at Rs 809.05 per share, a slight decrease from the previous closing price. Sharekhan, a well-known brokerage in India, gave a ‘Buy’ call on the bank stock with a target price of Rs 1,050 per share, indicating a potential upside of 30% from the current price.
Financial Condition of State Bank of India
State Bank of India’s revenue increased by 12% from Q2FY24 to Q2FY25, and net profit increased by 24% during the same period. The bank is expected to see steady growth and profitability, with strong asset quality and no major concerns in unsecured retail loans.
Rationale for Bullish Upside Potential
● SBI is projected to have double-digit deposit growth and ~15% loan growth for FY2025E, driven by a diverse portfolio.
● The bank’s CASA franchise remains strong, and the impact of potential rate cuts on margins is expected to be minimal.
● Credit costs are expected to remain low, with a gradual normalization unless there’s a significant economic downturn.
Also Read: 2024 Stock Market Recap: Winners and Losers; Indian Stock Market
State Bank of India’s Services
State Bank of India offers a wide range of products and services to individuals, commercial enterprises, corporations, public bodies, and institutional customers. The Company’s segments include Treasury, Corporate/Wholesale Banking, Retail Banking, Insurance Business, and Other Banking Business.
Stay tuned for more updates and insights on the stock market! For more insights on investing in the Indian stock market, check out resources like Moneycontrol and NSE India.
Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.