State Bank of India (SBI)’s market capitalization crossed the Rs 8 lakh crore mark on June 3. File | Photo source: Reuters
State Bank of India (SBI)’s market capitalization crossed the Rs 8 lakh crore mark on June 3 after the bank’s shares rose to a record high of ₹ 907.
SBI is currently the third largest bank in India in terms of market capitalization, very close to ICICI Bank which is the second largest. The bank’s market capitalization milestone was reached as the bank’s shares rose by more than 9% as the stock market surged to an all-time high of £909. Notably, SBI stock has surged over 50% in the last six months.
Finance Minister Nirmala Sitharaman recently posted on social media that the Indian banking sector has achieved a significant milestone by posting the highest-ever net profit of over Rs 3 lakh crore. She also emphasized that the government will take decisive steps to further strengthen the banking sector.
The bankruptcy code introduced by the government has improved the financial health of Indian banks, enabling recovery of bad loans worth Rs 10 lakh crore. “Between 2014 and 2023, banks recovered over Rs 10 lakh crore from bad loans,” she said.
The Nifty Bank Index also rose to a record high on June 3, crossing the 50,000 mark for the first time. The Nifty Index touched a recent high of 50,990 and at the time of filing this report, all the banking stocks included in it were trading higher.
In its recently released quarterly results, State Bank of India reported standalone net profit of ₹20,698.35 crore, up 24% year-on-year (Y-o-Y), on the back of higher interest income and low provisions. State Bank of India recorded a growth of 15.24% year-on-year (YoY) in lending at the end of March 2024.
Domestic advances increased by 16.26% and corporate advances and agricultural advances increased by Rs 11 lakh crore and Rs 3 lakh crore (y-o-y), respectively. Advances from the Ministry of Foreign Affairs increased by 9.47%, while retail loans to individuals and loans to enterprises recorded a y/y boost of 14.68% and 16.17% (y/y), respectively.
Deposits of the entire bank increased by 11.13% (y/y), including CASA deposits increased by 4.25% (y/y). The CASA ratio as of March 31, 2024 is 41.11%.
The impressive performance of SBI and the entire banking sector underscores investor confidence and positive prospects for the Indian banking sector. Bad loan recovery and government support measures have played a key role in strengthening banks’ financial stability, contributing to their recent achievements in market capitalization and net profit.
