State Bank of India
BSE SENSEX
28,330
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
S&P CNX
8,778
SBIN IN
7,974
2,199.5 / 32.8
289 / 148
6/13/55
5015
38.8
10 February 2017
3QFY17 Results Update | Sector: Financials
CMP: INR276
TP: INR350(+27%)
Buy
Financials & Valuations (INR b)
2016 2017E 2018E
Y/E Mar
NII
569 596.3 679.2
OP
433 475.0 503.7
NP
100 100.2 137.6
NIM (%)
3.0
2.8
2.8
EPS (INR)
15.7
8.6
21.6
EPS Gr. (%)
-30.8 -45.3 150.9
Cons. BV (INR)
222 229.0 246.6
Cons. ABV (INR)
159 143.4 169.3
RoE (%)
7.6
7.0
9.0
RoA (%)
0.5
0.4
0.5
Cons. P/E (x)
16.9
25.9
10.3
Cons. P/BV (x)
1.2
1.0
0.9
Liability franchise shows its strength; Healthy performance in weak environment
n
PAT of INR26.1b was in line with our estimate, with strong PPoP growth of 31% YoY
to INR125b (6% beat) led by better core income. Key positives in 3QFY17 were: a)
GNPAs flat QoQ; slippages of INR104b largely from corporate portfolio, of which
bulk (73%) were from the already identified watch-list. b) Impressive NIM despite
demonetization (stable QoQ at 2.74%). c) CASA deposits grew 35% YoY, with
robust SA deposit growth of 36%; daily average CASA ratio stood at 42.7%. d) Focus
on granular retail loan growth (18% YoY), led by strong growth in housing (18%)
and auto (20%).
n
Watch-list declined to INR180b from INR259b/INR348b in 1HFY17/FY16. Net
slippages declined 19% QoQ (2.4% net slippage ratio v/s 3.1% in 2Q). Pool of net
stressed loans (NNPL+ OSRL) was INR960.6t (6.6% of loans v/s 6.7% in 2Q). SBIN
utilized the RBI’s dispensation of asset classification on ~INR20b of loans; even
including this, non-corporate slippages were significantly low.
n
Harmonization of accounting policies and asset classification status continued to
mar earnings, leading to 9MFY17 loss of INR59b. We reduce earnings estimate for
the parent by 6% and consolidated earnings by 12% for FY17 (SBIN
subsidiaries
performance).
n
Other highlights:
(a) S/A CET1 ratio stood at ~10%, -31bp QoQ. b) Provisions were
elevated at INR89.4b. (b) Focus on high-quality corporates (79% of new loans rated
A and above v/s 72/50% in 3QFY16/3QFY15) led to continued improvement in
rating profile of the stock (65% rated A and above v/s 61/51% in 3QFY16/3QFY15).
d) Healthy fee income growth of 14.3% YoY.
n
Valuation and view:
We like SBIN for its lowest NSL of 6.7%, PCR of 63%, healthy
capitalization (CET1 of ~10%), strong liability franchise (CASA ratio: 46.5%) and
focus on core operating profitability. Asset quality performance was largely in line.
Although ABs surprised negatively, the worst is expected to be behind. Slippage
ratio is expected to decline in ensuing years. SBIN is highly geared to economic
upcycle and improvement in asset quality. Profitability is likely to be the highest
among peers due to its policy of recognizing stress upfront and lumpy exposures.
Buy
with SOTP-based TP of INR350 (1.1x Dec 18 BV + INR52 for investments).
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 6129 1526
Sohail Halai
(Sohail.Halai@MotilalOswal.com); +91 22 6129 1544

State Bank of India
Exhibit 1: Quarterly performance: in line results
Y/E March
Net Interest Income
% Change (YoY)
Other Income
Net Income
Operating Expenses
Operating Profit
% Change (YoY)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (YoY)
3QFY17A
147,515
7.7
96,619
244,135
118,702
125,433
31
89,428
36,004
9,904
26,100
134
3QFY17E
143,275
5.3
96,237
239,512
120,797
118,715
24
80,780
37,935
11,380
26,554
138
Var. (%)
3
0
2
-2
6
11
-5
-13
-2
Comments
NIMs higher than expected
In line
stronger NII and controlled opex led to PPoP beat
NPL provisions higher than expected
In line
Source: MOSL, Company
Net slippages declined 20bp
QoQ; 73% of corporate
slippages came from watch-
list accounts
Stress addition inline with guidance; Incremental trends positive
n
n
n
n
n
n
Of the total slippages of INR104b, bulk of fresh slippages came from the
corporate segment (INR100.7b); watch-list accounted for 73% of slippages.
Total watch-list declined to INR180b (1.2% of loans) from INR260bn in 2QFY17
and INR348b in FY16. Power constitutes 16% of the watch-list, followed by iron
and steel and construction at 11% each.
Absolute GNPA/NNPA increased 2% QoQ and were largely stable in % terms at
7.2% and 4.2% respectively. OSRL book declined 5% QoQ to INR346.3b (2.4% of
loans v/s 2.55% in 2QFY17).
Recoveries and upgrades stood at INR20.6b as compared to INR15.5b in
2QFY17. Net slippages declined 19% QoQ to INR83b from INR103b in the
previous quarter.
GNPA % declined across segments: SME (8.6% v/s 9.2% in 2Q), agriculture (5.9%
v/s 6.5% in 2Q) and retail (0.7% v/s 0.9% in 2Q). GNPA% in large corporate
segment increased to 8.7% from 7.4% in 2QFY17. While GNPA in mid-corporate
segment remained steady, it was elevated at 20.8%.
Standard stressed assets:
(a) SDR: INR94.4b (65bp of loans), (b) 5:25: INR171b
(118bp of loans) and (c) S4A Pipeline: INR86.5b (60bp of loans). Net stress loans
(NNPL + restructured loan) stood at INR960t (6.7% of the loans). However, there
may be some overlap.
Retail loans grew 18% YoY,
while consolidation in mid
corporate and SME
continued; corporate
advances growth ticked
down this quarter
Continued focus on increasing retail loan share led by housing and auto
n
n
n
While domestic loan growth was muted (4.2% YoY), retail loan growth
continued to show a healthy trend (17.5% YoY in 3QFY17). International loan
growth moderated to 7.5% YoY.
Retail loan growth was driven by strong growth of 18.3% YoY and 20% YoY in
home loans and auto loan segments respectively. Other personal loan segment
grew 15% YoY.
Bank continues to remain cautious in mid-corporate and SME segments, with
both segments de-growing 4.5% YoY and 11% YoY respectively. Large corporate
loan growth was also subdued at 2.4% YoY.
10 February 2017
2

State Bank of India
Stable NIMs at 2.74%; CASA
ratio improves 380bp QoQ
to 46.5%
Other highlights
n
n
n
Net interest income grew 8% YoY and 2% QoQ to INR147.5b, which is a strong
performance considering the impact of demonetization on credit growth, yields,
and CRR. NIMs (derived) were largely stable on a sequential basis at 2.74% (-3bp
QoQ despite a change in asset mix (sharp fall in C-D ratio to 71% v/s 77% in 2Q).
Other income grew 58% YoY led by strong trading gains of INR22.2b and one off
stake sale in in SBI Life amounting to INR17.55b.
CASA deposits grew 35% Yoy led by robust SA deposit growth of 36% YoY (+20%
QoQ). CA deposits grew 28% YoY (+20% QoQ). Overall CASA ratio increased
380bp sequentially to 46.5%. Average daily CASA ratio stood at 42.7%.
YoY (%)
48.6
52.6
213 bps
135 bps
-150 bps
-236 bps
-49.9
98.8
-57.8
-28.7
-60
-110 bps
Exhibit 2: Asset quality performance during the quarter
Asset quality (INR b)
GNPA
NNPA
GNPA (%)
NNPA (%)
PCR (Cal,%)
PCR (Rep, %)
Other details
Slippages
Upgradation & Recoveries
Net slippages
Restructured loans
OSRL (as restated)
Net addition in the quarter
OSRL (%)
NSL (NNPA+OSRL)
Net stress loans
NSL (%)
NSL/NW (%, Post tax)
(NNPA+25% OSRL)/NW (%, Post tax)
Net slippages+ Add to RL
Net stress addition (Post Prov)
3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 QoQ (%)
620
567
564
568
728
982
1,015 1,058 1,082
2.3
345
276
287
286
402
558
574
600
614
2.4
4.9
4.3
4.3
4.2
5.1
6.5
6.9
7.1
7.2
9 bps
2.8
2.1
2.2
2.1
2.9
3.8
4.1
4.2
4.2
5 bps
44
51
49
50
45
43
43
43
43
-6 bps
64
69
69
70
65
61
62
62
63
75 bps
70
13
58
465
26
3.8
810
6.6
44
38
84
41
48
52
-4
558
93
4.3
834
6.4
45
38
89
24
73
27
46
560
1
4.4
846
6.6
44
36
47
12
59
15
44
535
-25
4.0
820
6.1
39
33
19
-26
207
10
197
486
-49
3.5
888
6.4
42
37
148
68
303
17
286
391
-95
2.7
949
6.5
46
41
190
60
108
28
80
366
-25
2.6
940
6.6
37
33
55
-9
119
16
103
366
0
2.6
966
6.7
37
34
103
26
104
21
83
346
-19
2.4
-12.6
33.0
-19.5
-5.3
-10,321
-16 bps
961
-0.5
8.1
6.6
-11 bps 25 bps
37
33
64
-38.4
-57.1
-5
-120.1
-107.7
Source: MOSL, Company
3QFY17 Concall Highlights
Asset Quality related
n
5:25: 16 accounts ~INR171b; SDR: 15 accounts ~INR94.4b; S4A: 10 accounts
~INR86.45b. Significant overlap between the watch list and 5:25/SDR/S4A,
moreover, lot of accounts have already slipped from these to NPA, so the o/s
standard (non-restructured) loans would be less.
n
Current resolution mechanisms may not have the best structural fit with the
bank’s assets. The bank prefers deep restructuring rather than S4A/SDR.
n
Watch list may be revised, but there could be movements both in and out of the
watch-list and hence, the size may not actually increase to a significant extent.
n
35% of the provisions are for the new slippages and 65% is for NPL ageing;
INR60b of standard asset provisioning is not taken in PCR calculation.
n
Most of the power exposure is to PSUs like NPCL and exposure to DISCOM is
fairly less. Hence, power constitutes a low figure in watchlist.
10 February 2017
3

State Bank of India
n
n
n
n
NPA in iron & steel at INR285.2b, power INR41.15b (very less exposure to gas
based power plants and hence, lower slippage figure), and textile ~INR83.38b.
Banks are able to resolve bad accounts at a faster pace as well at a lesser haircut
than ARCs. Hence, the ARC model needs to be reworked to a fair extent
GNPA consol ~INR551.6b, NNPA consol ~INR348.68b; OSRL consol ~INR127.93b
Slippage from restructured book at INR20b
Balance Sheet related
n
Overall growth guidance of 11%, with retail growth at 17-18%; rest of the
growth to come from the corporate segment. Next year the management
expects higher working capital requirements.
n
Large scale redemption of CASA deposits could lead to deposit rate cuts in order
to maintain COF.
n
40% of loans are linked to MCLR, with 60% still linked to base rate
n
RWA at the end of the quarter stood INR14.46t
n
AFS book stood at INR3.87t with average duration of 1.55 years; HTM book ~INR
4.07t with duration of 5.19 years. On an aggregate basis the overall duration
was 3.52 years
P/L related
n
The bank incurred additional expenses of INR25b in respect of pension
obligations this quarter (on account of falling yields).
n
Margins could come off slightly by 5-6 bps. It will be impacted by redemption of
CASA deposits as well as fall in interest rate yields.
n
Target C/I below 50%
n
Total interest income reversal during the quarter was INR7.24b. There was no
interest income reversal on SDR/S4A as per RBIs guideline.
Other highlights
n
Including 9MFY17 retained earnings (~40bp) and capital raise(~39bp), CAR
would be higher by 79bp at ~14.5% as against the reported 13.7%
n
Average balance in SA deposits stood at INR31,000
n
Preliminary preparations for IND-AS has been done; awaiting RBI’s clarification
on this
10 February 2017
4

State Bank of India
SBI Subsidiaries 3QFY17 performance: Another loss making quarter;
Balance sheet consolidation and provsisioning dents profitability
(SBI
Subsidiaries 3QFY17 performance)
RBI AQR, harmonization of asset recognition with the parent, resultant NPA
provisions and balance sheet consolidation continues to mar earnings at the
associate banks (ABs) level. Interest reversals on SDR and S4A accounts, share rise
in NPA in 1H, loans decline of 5% YoY impacted NII performance (-22% YoY and
14% QoQ) for 3Q. While PPoP declined QoQ (32%), sharp drop in provisioning
(INR10.9b vs INR39.3b a quarter ago) helped to restrict losses at INR7.9b vs
INR31b quarter ago. GNPAs were largely stable QoQ at INR552b; However PCR
(calc) declined 330bp QoQ to ~37% - Indicating higher write offs.
PPoP de-grew 32% QoQ,
sharp drop in provisioning
helped to restrict losses to
INR7.9b v/s INR31b a
quarter ago
Harmonization of asset quality within SBIN group
Before merger, SBIN (parent) is harmonizing account classification across its
associate bank. In 9MFY17, all ABs put together classified standard accounts worth
INR110-120B (3-3.2% of loans) as NPAs. This account classification has resulted into
additional provisioning of INR58b (~40% of NPA provisions) in 9MFY17. ABs GNPA
ratio increased to 14.5% vs 13.8% a quarter ago (5.2% a year ago). Maximum
deterioration was noticed in SBP and GNPA has reached to 19.3% vs 7% a year ago.
All ABs but SBP reported harmonization related NPA classification and provisions.
We have assumed the same for SBP at INR30b and provision of INR20b.
Losses decline sharply QoQ – Most of the harmonization is behind
Aggregate ABs losses declined to INR7.9b vs INR31b a quarter ago. Although
operating profits declined to INR18.5b vs INR27.6b a quarter ago, sharp fall in
provisioning from INR67b to INR29b helped to report improvement in earnings.
Provisioning for harmonization of asset classification was accelerated in 1H.
Exhibit 3: SBI Associate banks aggregate performance
Net Interest Income
% Change (Y-o-Y)
Other Income
% Change (Y-o-Y)
Net Income
% Change (Y-o-Y)
Operating Expenses
% Change (Y-o-Y)
Operating Profit
% Change (Y-o-Y)
Other Provisions
Profit before Tax
Tax Provisions
Net Profit
% Change (Y-o-Y)
Loan Gr. (YoY, %)
Cost to income (%)
Gross NPA (INR b)
Gross NPA (%)
Net NPA ( INR b)
Net NPA (%)
PCR (%)
1Q
34,791
4.2
10,499
-6.3
45,290
1.5
24,166
11.6
21,124
-7.9
10,554
10,569
3,547
7,022
-16.1
8.0
53.4
176.5
4.9
99.6
2.8
43.6
FY15
2Q
35,832
7.3
9,028
12.7
44,860
8.3
23,876
2.8
20,984
15.5
12,608
8,376
2,059
6,317
51.6
4.4
53.2
190.1
5.3
110.0
3.1
42.1
3Q
35,339
2.6
11,647
44.2
46,985
10.5
25,091
5.0
21,894
17.6
11,209
10,686
3,820
6,866
54.3
4.9
53.4
197.7
5.4
117.8
3.3
40.4
4Q
37,048
3.4
19,232
34.9
56,280
12.4
27,078
7.4
29,202
17.4
10,639
18,562
6,763
11,799
9.4
5.5
48.1
167.8
4.4
96.9
2.6
42.3
1Q
38,278
10.0
11,393
8.5
49,670
9.7
24,740
2.4
24,931
18.0
11,600
13,331
4,953
8,378
19.3
5.5
49.8
186.8
4.9
103.8
2.8
44.5
FY16
2Q
37,651
5.1
12,236
35.5
49,888
11.2
24,563
2.9
25,324
20.7
12,380
12,944
4,211
8,734
38.3
3.7
49.2
182.3
4.9
99.1
2.7
45.7
3Q
38,338
8.5
12,820
10.1
51,158
8.9
26,591
6.0
24,567
12.2
24,581
-14
1,801
-1,815
NA
5.3
52.0
202.2
5.2
109.4
2.9
45.9
4Q
37,660
1.7
18,907
-1.7
56,567
0.5
27,104
0.1
29,463
0.9
30,716
-1,253
-1,868
615
-94.8
3.7
47.9
238.0
6.0
131.8
3.4
44.6
1Q
37,840
-1.1
16,789
47.4
54,629
10.0
26,264
6.2
28,365
13.8
56,229
-27,864
-7,683
-20,181
NA
4.7
48.1
361.4
9.1
208.2
5.5
42.4
FY17
2Q
34,945
-7.2
18,805
53.7
53,751
7.7
26,158
6.5
27,593
9.0
66,818
-39,225
-8,241
-30,983
NA
4.8
48.7
540.2
13.8
323.5
8.7
40.1
3Q
29,948
-21.9
18,423
43.7
48,371
-5.4
29,784
12.0
18,587
-24.3
29,474
-10,887
-2,999
-7,888
NA
-1.8
61.6
551.6
14.5
348.7
9.7
36.8
Source: MOSL, Company
10 February 2017
5

State Bank of India
Valuation and view
Buy with a target price of
INR350 (1.1x Dec 18 BV +
INR52 for investments).
n
n
n
n
n
n
n
Trend on asset quality are improving for SBIN with most of the stress in the key
stress sectors recognized. Power remains a key issue for the sector however,
SBI remains comfortable due to larger exposure towards PSU entities and top
rated private corporates.
73% of slippages in 3QFY17 happened from watch list and current pool of
watch-list stands at INR180b (1.2% of the loans). Management guidance for
FY17 slippages remains unchanged (INR400b); and is hopeful of better asset
quality trend in coming years (increase in resolution of stressed accounts and
lowering of the watch-list). We expect slippage ratio to moderate to 2.25% of
loans in FY18 v/s 3% in FY17 and ~5% for FY16. Ageing of NPL and management
focus on increasing the coverage ratio will keep the credit cost high in the
balance sheet.
We have reduced our earnings estimate for parent bank by 6% for FY17.
However, harmonizing the accounting policies and asset classification by
associate banks is leading to 12% cut in consolidated earnings for FY17 and 7/5%
for FY18/19.
Non-core income can surprise earnings positively. The bank has a significant
pool of written off accounts, whereby, recoveries could be higher and surprise
positively. Traction in the recoveries from written off accounts is picking up over
the last few quarters and we expect trend to sustain.
Overall we expect PAT CAGR of 23% over FY16-19E (PPoP CAGR of 10%) and RoA
is expected to improve to 0.6% by FY19 as compared 0.45% in FY16. SBIN is
highly levered to macro-economic conditions and improvement in investment
climate would assuage asset quality fears. Improvement of just 10bp in NIMs
and credit cost can lead 15% upgrade in earnings and 170bps improvement in
ROEs.
Within PSU banks, SBIN remains the best play recovery in Indian economy with
lowest NSL at 6.7%, relatively healthy PCR of 63%+, conservation of capital,
healthy capitalization (CET of ~10%), strong liability franchise (Retail deposits of
>95%) and focus on core operating profitability.
SBIN is relatively better placed in case of consolidation in PSB as it would only be
absorbing its associate banks wherein, technology platform, work culture and
asset recognition policies are largely the same. Management remains optimistic
about the merger and related synergies. In our view, biggest risk from merger
with associate banks is the integration of 70k+ employees. The stock trades at
1.1x FY18 consol. BV of IINR247 and 10.3x 18 consolidated EPS of INR21.6. We
assign SBIN a SOTP based TP of INR350 (1.1x December 18 BV +INR52/share for
investments). Assumptions for RI model: 13% cost of equity, 7% risk free rate,
Beta 1.2, 5% market risk premium and terminal growth of 5%. Reiterate
Buy.
10 February 2017
6

State Bank of India
Exhibit 4: We cut standalone bank’s estimates by 6% in FY17 to factor in higher credit costs
INR B
Net Interest Income
Other Income
Total Income
Operating Expenses
Operating Profits
Provisions
PBT
Tax
PAT
Loans
Deposits
Margins (%)
Credit Cost (%)
RoA (%)
RoE (%)
Old Estimates
Revised Estimates
FY17
FY18
FY19
FY17
FY18
FY19
579
667
757
596
679
767
365
364
394
354
349
386
944
1,030 1,151
951
1,028 1,154
478
530
587
476
525
579
466
501
563
475
504
574
316
294
290
337
307
308
150
206
274
138
197
267
43
66
88
38
59
80
106
140
186
100
138
187
15,222 17,049 19,436 15,369 17,213 19,623
19,730 21,703 23,874 20,249 22,274 25,170
2.74
2.78
2.84
2.78
2.78
2.79
2.00
1.70
1.45
1.98
1.65
1.40
0.44
0.52
0.63
0.41
0.50
0.61
7.46
9.20 11.28
7.03
9.04
11.33
Change (%)
FY17
FY18
3.0
1.9
-3.0
-4.0
0.7
-0.2
-0.6
-1.0
2.0
0.6
6.6
4.5
-7.8
-4.8
-12.6
-10.8
-5.9
-2.0
1.0
1.0
2.6
2.6
FY19
1.4
-1.9
0.3
-1.3
1.9
6.1
-2.5
-8.6
0.4
1.0
5.4
Source: MOSL, Company
Exhibit 5: SBIN SOTP Valuation
Company
SBI Life
SBI General
UTI MF
SBI MF
NSE
Other investments
Value of ventures
Less: 20% Holdco dis
Value of investments (A)
Banking Business (B)
Total (A+B)
Market Cap
Upside (%)
Entity Value
(INR Bn)
483
47
60
67
200
Stake
70.0
74.0
18.3
63.0
9.5
Value for SBIN
(INR Bn)
338.1
35.0
11.0
42.3
19.0
60.0
505
101
404
2,308
2,712
2,143
27
Value Per Share
(INR)
44
5
1
5
2
8
65
13
52
297
350
276
27
Rationale
3x FY19 EV
3.5x Trailing BV
4.0% of the Sept AAUM
4,2% of the Sept AAUM
Based on last deal value
RI model; 1.1x December 18 BV
Source: MOSL, Company
Exhibit 6: One year forward P/BV
2.7
1.9
PB (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
2.3
Exhibit 7: One year forward P/E
23
18
PE (x)
Median(x)
Peak(x)
Min(x)
Avg(x)
21.2
1.3
1.1
0.3
1.2
0.7
1.1
13
8
3
11.7
5.6
11.7
12.5
Source: MOSL, Company
Source: MOSL, Company
10 February 2017
7

State Bank of India
Exhibit 8: DuPont Analysis: lower credit costs to drive RoA improvement
Y/E MARCH
Net Interest Income
Fee income
Fee to core Income
Core Income
Operating Expenses
Cost to Core Income
Employee cost
Others
Core Operating Profit
Trading and others
Operating Profit
Provisions
NPA
PBT
Tax
Tax Rate
RoA
Leverage (x)
RoE
FY12
3.38
0.95
21.0
4.33
2.04
47.1
1.33
0.71
2.29
0.18
2.47
1.02
0.90
1.44
0.53
36.7
0.91
17.5
16.0
FY13
3.06
0.80
19.2
3.85
2.02
52.4
1.27
0.75
1.83
0.31
2.14
0.77
0.73
1.38
0.40
29.3
0.97
16.4
15.9
FY14
2.93
0.75
18.5
3.68
2.13
57.8
1.34
0.79
1.55
0.36
1.91
0.95
0.82
0.96
0.31
32.7
0.65
16.2
10.5
FY15
2.87
0.73
18.0
3.59
1.98
55.1
1.23
0.76
1.61
0.45
2.06
1.05
0.86
1.01
0.32
32.2
0.68
16.4
11.2
FY16
2.64
0.73
18.4
3.37
1.94
57.6
1.17
0.77
1.43
0.58
2.01
1.37
1.33
0.64
0.18
27.8
0.46
16.5
7.6
FY17E
2.45
0.75
19.1
3.19
1.95
61.1
1.15
0.80
1.24
0.71
1.95
1.38
1.21
0.57
0.16
27.5
0.41
17.1
7.0
FY18E
2.47
0.76
20.3
3.23
1.91
59.1
1.11
0.80
1.32
0.51
1.83
1.12
0.98
0.72
0.21
30.0
0.50
18.0
9.0
FY19E
2.51
0.79
20.8
3.30
1.90
57.5
1.08
0.82
1.40
0.48
1.88
1.01
0.84
0.87
0.26
30.0
0.61
18.5
11.3
Source: MOSL, Company
Exhibit 9: DuPont Analysis:
Y/E MARCH
Interest Income
Interest Expended
Net Interest Income
Fee income
Fee to core income (%)
Core Income
Operating Expenses
Cost to Core Income
Employee cost
Emp cost to Opex
Others
Core operating Profits
Non Interest income
Trading and others
Operating Profits
Provisions
NPAs
Others
PBT
Tax
Tax Rate
RoA
Leverage
RoE
1QFY15
8.09
5.15
2.94
0.73
24.7
3.66
1.93
52.8
1.23
63.8
0.70
1.73
0.94
0.22
1.95
0.78
0.87
-0.09
1.17
0.43
36.7
0.74
15.0
11.16
2QFY15
8.08
5.20
2.88
0.77
26.8
3.65
2.04
56.0
1.21
59.0
0.84
1.61
0.99
0.22
1.83
0.93
0.87
0.05
0.90
0.23
25.2
0.67
14.9
10.04
3QFY15 4QFY15
8.16
8.12
5.24
5.14
2.92
2.98
0.80
1.10
27.5
36.9
3.72
4.08
2.06
2.12
55.3
52.0
1.24
1.33
60.1
62.7
0.82
0.79
1.66
1.96
1.11
1.72
0.31
0.62
1.97
2.58
1.11
1.41
1.00
0.94
0.11
0.47
0.86
1.18
0.24
0.42
28.3
35.7
0.62
0.76
14.9
15.4
9.17
11.65
1QFY16
7.74
5.06
2.68
0.72
26.9
3.40
1.88
55.2
1.15
61.4
0.72
1.52
0.99
0.27
1.80
0.78
0.66
0.13
1.02
0.29
29.0
0.72
15.5
11.17
2QFY15 3QFY16
7.82
7.54
5.08
5.00
2.74
2.54
0.70
0.74
25.4
29.0
3.44
3.28
1.96
1.89
57.0
57.6
1.18
1.14
60.3
60.1
0.78
0.75
1.48
1.39
1.19
1.13
0.49
0.39
1.97
1.78
0.84
1.47
0.74
1.42
0.10
0.06
1.14
0.31
0.39
0.10
34.3
32.3
0.75
0.21
14.8
14.8
11.02
3.05
4QFY16 1QFY17 2QFY17 3QFY17
7.51
7.21
7.29
7.07
4.83
4.71
4.79
4.69
2.68
2.49
2.51
2.37
1.12
0.69
0.90
0.74
41.8
27.7
35.7
31.2
3.80
3.18
3.40
3.11
2.07
1.83
2.00
1.91
54.4
57.5
58.7
61.3
1.22
1.08
1.18
1.15
58.9
59.1
58.9
60.1
0.85
0.75
0.82
0.76
1.73
1.35
1.40
1.20
1.88
1.25
1.42
1.55
0.76
0.56
0.52
0.81
2.49
1.91
1.93
2.02
2.31
1.28
1.36
1.44
2.13
1.09
1.32
1.17
0.18
0.19
0.04
0.27
0.18
0.63
0.57
0.58
-0.04
0.19
0.14
0.16
-24.2
30.8
23.7
27.5
0.22
0.44
0.44
0.42
15.7
14.3
12.9
13.7
3.48
6.24
5.64
5.74
Source: MOSL, Company
10 February 2017
8

State Bank of India
Story in charts
Exhibit 10: Slippages at elevated levels; well within guidance
Slippages (INR b)
Exhibit 11: Upgrades/recoveries pick up from 2Q, remain
moderate
Upgradation & Rec (INR b)
Source: MOSL, Company
Source: MOSL, Company
Exhibit 12: Overall GNPA ratio remained stable; 2% QoQ
increase in absolute terms
Gross NPA (INR b)
Gross NPA (%)
Exhibit 13: NNPA ratio stable QoQ; PCR (incl. w/o) increased
~75bp QoQ (62.9%)
Net NPA (INR b)
2.6
2.8 2.9
3.2
Net NPA (%)
2.1 2.2 2.1
2.9
3.8 4.1
4.2 4.2
2.1
2.6 2.7 2.7 2.8
Source: MOSL, Company
Source: MOSL, Company
Exhibit 14: Large corporate GNPA ratio rises further,
moderation seen in retail and SME
FY13
FY14
FY15
FY16
9MFY17
Exhibit 15: OSRL book decreased 5% QoQ to INR346b (2.4%
of overall loans)
O/s Restructured Loan (INR b)
3.1 3.1
3.6 3.4 3.6 3.5 3.6 3.8
4.3
4.4
4.0
as % of loan book
3.5
2.7 2.6 2.6 2.4
2.4
Large corp. Mid Corp.(%)
(%)
SME (%)
Agri (%)
Retail (%)
Source: MOSL, Company
Source: MOSL, Company
10 February 2017
9

State Bank of India
Story in charts
Exhibit 16: Cost to income ratio up 175 bp QoQ (%)
59 60
51
62
59
54
51
58 57
53
57
59 59
59
56
62 63
Exhibit 17: Loan growth continued to moderate QoQ
Loans (INR t)
YoY Gr (%)
Source: MOSL, Company
Source: MOSL, Company
Exhibit 18: CD ratio declines to 580bp QoQ (%)
Calc. Domestic CD Ratio
78 80 77 79 77 79 76 73 73 74
70 71 74 76 70 68
62
Exhibit 19: Domestic CASA ratio up 380bp QoQ (%)
Source: MOSL, Company
Source: MOSL, Company
10 February 2017
10

State Bank of India
SBI Group performance in 3QFY17
Exhibit 20: Net interest income growth (% YoY)
25
SBI (Standalone)
SBI Subsidiaries
Exhibit 21: Operating profit growth (% YoY)
60
30
SBI (Standalone)
SBI Subsidiaries
0
0
-25
-30
Source: MOSL, Company
Source: MOSL, Company
Exhibit 22: Net profit (INRb)
45.0
25.0
5.0
-15.0
-35.0
SBI (Standalone)
SBI Subsidiaries
Exhibit 23: Gross loan growth (% YoY)
24
18
12
6
0
-6
SBI (Standalone)
SBI Subsidiaries
Source: MOSL, Company
Source: MOSL, Company
Exhibit 24: Gross NPA (% of loans)
200
175
150
125
100
75
50
25
0
-25
SBI (Standalone)
SBI Subsidiaries
Exhibit 25: Calculated PCR (%)
64
57
50
43
36
SBI (Standalone)
SBI Subsidiaries
Source: MOSL, Company
Source: MOSL, Company
10 February 2017
11

State Bank of India
Exhibit 26: Quarterly snapshot
INR m
1Q
Profit and Loss
Net Interest Income
Other Income
Trading profits
Fee Income
Forex Income
Others
Total Income
Operating Expenses
Employee
Others
Operating Profits
Provisions
PBT
Taxes
PAT
Asset Quality (INR b)
GNPA
NNPA
GNPA (%)
NNPA (%)
PCR (Calculated, %)
PCR (Reported, %)
Slippages
Slippage Ratio (%)
Prov. for NPA in qtr
Credit Cost (%)
Ratios (%)
Fees to Total Income
Cost to Core Income
Tax Rate
Loan/Deposit
Domestic Loan/Deposit
CAR
Tier I
RoA (cal)
RoE (Cal)
Margins - derived (%)
Yield on Advances
Cost of Deposits
Quarterly margins
2Q
FY15
3Q
4Q
1Q
2Q
FY16
3Q
4Q
1Q
FY17
2Q
3Q
Variation (%)
QoQ
YoY
1
17
73
-7
-34
45
7
2
4
-1
12
13
8
25
3
2
2
9
5
-6
75
-13
-57
-6
-14
8
59
221
14
27
24
23
17
17
16
31
12
118
86
134
49
53
213
135
-150
-236
-50
-374
-5
-23
132,522 132,746 137,766 147,118
42,521 45,708 52,378 85,153
5,868 4,664 9,195 16,589
28,372 31,109 32,906 49,007
4,330 4,528 5,018 5,349
3,952 5,407 5,259 14,208
175,043 178,454 190,144 232,270
87,166 94,234 97,200 104,673
55,646 55,639 58,420 65,665
31,520 38,595 38,779 39,007
87,877 84,219 92,945 127,598
34,967 42,750 52,349 69,433
52,910 41,469 40,596 58,165
19,419 10,465 11,495 20,744
33,491 31,004 29,101 37,420
604
319
4.9
2.7
47.2
62.7
99
3.7
39
1.3
16.2
51.5
36.7
84.5
77.9
12.3
9.6
0.7
11.2
10.5
6.3
3.1
607
330
4.9
2.7
45.7
63.2
77
2.8
40
1.3
17.4
54.2
25.2
82.1
75.6
12.3
10.1
0.7
10.0
10.5
6.4
3.1
620
345
4.9
2.8
44.4
63.6
70
2.5
47
1.5
17.3
53.7
28.3
81.6
75.7
12.7
10.0
0.6
9.2
10.6
6.4
3.2
567
276
4.3
2.1
51.4
69.1
48
1.6
46
1.5
21.1
48.5
35.7
82.4
74.0
12.0
9.6
0.8
11.6
10.6
6.4
3.3
137,320 142,526 136,970 152,907 144,373 146,002 147,515
50,880 61,973 60,870 106,956 72,101 82,614 96,619
8,724 14,940 12,350 14,160 27,230 22,910 39,690
32,021 31,530 35,090 57,940 33,970 43,170 40,110
4,887 4,740 4,640 5,960 5,960 9,000 5,910
5,249 10,763 8,790 28,896 4,941 7,534 10,909
188,200 204,498 197,840 259,864 216,474 228,616 244,135
96,179 101,839 101,861 117,945 105,935 116,373 118,702
59,064 61,421 61,226 69,428 62,566 68,532 71,373
37,115 40,418 40,635 48,517 43,370 47,841 47,329
92,021 102,659 95,979 141,919 110,539 112,243 125,433
39,997 43,606 79,494 131,741 74,131 78,967 89,428
52,024 59,053 16,485 10,178 36,408 33,276 36,004
15,099 20,262 5,332 -2,460 11,198 7,893 9,904
36,924 38,791 11,153 12,638 25,210 25,383 26,100
564
287
4.3
2.2
49.2
69.5
73
2.4
34
1.0
17.0
53.6
29.0
79.3
69.7
12.0
9.6
0.7
11.2
10.3
6.4
3.0
568
286
4.2
2.1
49.7
70.5
59
1.9
38
1.2
15.4
53.7
34.3
81.8
71.3
12.2
9.9
0.7
11.0
10.3
6.3
3.0
728
402
5.1
2.9
44.7
65.2
207
6.7
76
2.2
17.7
54.9
32.3
83.2
73.6
12.5
9.6
0.2
3.1
10.1
6.3
2.8
982
558
6.5
3.8
43.2
60.7
303
9.3
121
3.4
22.3
48.0
-24.2
84.6
75.7
13.1
9.9
0.2
3.5
10.0
6.2
3.1
1,015
574
6.9
4.1
43.5
61.6
108
3.4
63
1.8
15.7
56.0
30.8
79.5
70.1
14.0
10.7
0.4
6.2
9.6
6.0
2.8
1,058
600
7.1
4.2
43.3
62.1
119
3.5
77
2.2
18.9
56.6
23.7
77.1
67.8
13.9
10.9
0.4
5.6
9.5
5.9
2.8
1,082
614
7.2
4.2
43.2
62.9
104
3.0
72
2.0
16.4
58.1
27.5
70.9
61.9
13.7
10.7
0.4
5.7
9.5
5.9
2.8
-8
-8
3
-66
-40
3
Source: MOSL, Company
10 February 2017
12

State Bank of India
Exhibit 27: Quarterly snapshot continued
FY15
INR b
Balance sheet
Capital
Reserves & Surplus
Net Worth
Deposits
Domestic
Overseas
Borrowings
Other Liabilities & Prov.
Total Liabilities
Assets
Cash/RBI
Short term funds
Investments
Loans
Domestic
Overseas
Net Fixed Assets
Other Assets
Total Assets
Deposit Break-up
CASA Deposits
Savings Deposits
% of Total Deposits
Current Deposits
% of Total Deposits
CASA (Cal)
CASA Reported
Domestic Loan Break Up
Large Corporate
Mid Corporate
SME
Agriculture
Retail
Others
Domestic Loan Mix (%)
Large Corporate
Mid Corporate
SME
Agriculture
Retail
Others
1Q
2Q
3Q
4Q
1Q
2Q
FY16
3Q
4Q
1Q
FY17
2Q
3Q
Variation (%)
QoQ
YoY
0
1
1
10
10
-2
9
-7
8
22
-42
31
1
1
2
0
-2
8
20
20
332
20
55
386
381
-1
-1
-3
-3
3
34
0
25
25
22
24
-4
-5
-9
17
33
47
39
4
3
7
346
20
17
35
36
384
28
33
418
385
2
-4
-11
3
18
30
7
7
7
7
8
8
8
8
8
8
8
1,211 1,245 1,278 1,277 1,352 1,448 1,458 1,435 1,783 1,801 1,823
1,218 1,252 1,286 1,284 1,360 1,456 1,466 1,443 1,791 1,809 1,831
14,189 14,738 15,101 15,768 16,135 16,341 16,714 17,307 17,824 18,590 20,408
13,312 13,829 14,177 14,872 15,249 15,422 15,791 16,364 16,990 17,684 19,517
878
909
923
896
886
919
923
943
834
906
891
1,873 1,868 1,817 2,052 2,067 2,255 2,758 3,233 2,175 2,389 2,613
864
885
838
1,377
949
1,053 1,106 1,593
954
1,079 1,005
18,144 18,743 19,041 20,481 20,511 21,104 22,044 23,576 22,744 23,867 25,857
734
709
698
1,159
772
783
800
1,296
807
872
1,061
302
528
386
389
370
323
257
378
412
647
378
4,361 4,857 4,769 4,818 5,629 5,674 6,000 5,757 5,903 6,389 8,339
11,989 12,096 12,325 13,000 12,801 13,372 13,913 14,637 14,165 14,336 14,478
9,751 9,824 10,079 10,655 10,292 10,713 11,256 11,969 11,461 11,527 11,623
2,238 2,272 2,247 2,345 2,510 2,658 2,657 2,668 2,704 2,809 2,855
81
85
88
93
94
96
96
104
425
427
427
676
467
774
1,022
844
856
978
1,404 1,032 1,196 1,173
18,144 18,743 19,041 20,481 20,511 21,104 22,044 23,576 22,744 23,867 25,857
5,791
4,894
34.5
897
6.3
40.8
43.5
2,263
2,161
1,730
1,184
2,425
323
23.2
22.2
17.7
12.1
24.9
3.3
5,918
5,009
34.0
909
6.2
40.2
42.8
2,330
2,159
1,680
1,211
2,493
281
23.7
22.0
17.1
12.3
25.4
2.9
6,036
5,093
33.7
944
6.2
40.0
42.6
2,497
2,106
1,679
1,204
2,602
319
24.8
20.9
16.7
12.0
25.8
3.2
6,378
5,139
32.6
1,239
7.9
40.4
42.9
2,820
2,176
1,815
1,198
2,724
277
26.5
20.4
17.0
11.2
25.6
2.6
6,359
5,391
33.4
968
6.0
39.4
41.7
2,560
2,000
1,746
1,158
2,801
363
24.9
19.4
17.0
11.3
27.2
3.5
6,514
5,504
33.7
1,010
6.2
39.9
42.2
2,835
2,047
1,766
1,184
2,910
252
26.5
19.1
16.5
11.1
27.2
2.4
6,743
5,684
34.0
1,059
6.3
40.3
42.7
3,012
2,138
1,819
1,211
3,083
366
26.8
19.0
16.2
10.8
27.4
3.2
7,173
5,816
33.6
1,358
7.8
41.4
43.8
3,290
2,326
1,895
1,254
3,271
356
27.5
19.4
15.8
10.5
27.3
3.0
7,268
6,169
34.6
1,098
6.2
40.8
42.8
3,082
2,071
1,821
1,246
3,371
311
26.9
18.1
15.9
10.9
29.4
2.7
7,558
6,420
34.5
1,138
6.1
40.7
42.7
3,124
2,055
1,661
1,286
3,505
354
27.1
17.8
14.4
11.2
30.4
3.1
9,085
7,724
37.8
1,361
6.7
44.5
46.6
3,083
2,042
1,618
1,251
3,622
474
26.5
17.6
13.9
10.8
31.2
4.1
Source: MOSL, Company
10 February 2017
13

State Bank of India
Exhibit 28: Valuation metrics
Rating
66
ICICIBC*
HDFCB
AXSB
KMB*
YES
IIB
IDFC Bk
FB
DCBB
JKBK
SIB
Equitas
RBL
Private Aggregate
SBIN (cons)*
PNB
BOI
BOB
CBK
UNBK
OBC
INBK
ANDB
Public Aggregate
Banks Aggregate
HDFC*
LICHF
IHFL
GRHF
REPCO
DEWH
Housing Finance
RECL
POWF
Infra Finance
SHTF
MMFS
BAF
MUTH
SKSM
Asset Finance
NBFC Aggregate
Financials
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
Neutral
Buy
Buy
CMP
(INR)
282
1,305
489
778
1,411
1,323
63
84
136
69
23
187
389
276
145
134
188
311
150
126
303
57
Mcap
(USDb)
24.8
50.5
17.6
21.6
9.0
11.9
3.2
2.2
0.6
0.5
0.5
0.9
2.1
142.5
32.5
4.7
2.1
6.6
2.6
1.6
0.7
2.2
1.8
54.6
197.1
33.2
4.2
5.2
2.0
0.7
1.4
46.7
4.4
5.4
9.8
3.3
2.5
1.7
2.1
1.7
11.3
67.8
264.9
EPS (INR)
FY17 FY18
17.2 17.9
56.9 68.3
14.1 25.0
26.3 32.3
79.3 97.0
48.4 58.7
3.1
3.9
4.6
5.5
7.1
8.6
-25.2 13.0
2.8
3.1
6.1
6.9
12.4 17.5
9.8
6.7
-5.6
12.3
23.9
8.5
6.6
30.4
1.5
23.3
12.7
17.1
18.8
36.7
30.5
19.6
32.2
6.4
P/E (x)
FY17
12.3
22.9
34.8
29.6
17.8
27.3
20.5
18.4
19.2
-2.7
8.3
30.8
31.3
24.5
25.1
21.6
-24.0
15.3
13.0
17.7
19.1
10.0
36.9
19.8
23.0
24.1
14.7
11.7
46.6
28.2
9.9
22.7
5.0
5.6
5.3
16.6
35.3
30.9
12.4
18.1
14.0
14.4
19.9
FY18
11.2
19.1
19.6
24.1
14.5
22.5
15.9
15.4
15.8
5.3
7.4
26.9
22.2
19.3
10.5
11.4
7.9
10.0
8.5
4.9
6.4
9.4
8.8
11.8
16.4
20.4
12.4
9.4
37.3
19.3
8.5
19.6
4.1
5.3
4.7
12.4
26.9
23.6
10.6
18.9
11.3
12.4
15.2
BV (INR)
FY17 FY18
145 158
328 380
231 251
207 238
391 468
333 383
43
46
51
55
69
77
107 117
30
32
67
74
114 129
230
182
238
156
496
301
402
304
109
249
193
251
170
524
328
417
329
114
P/BV (x)
FY17
1.46
3.98
2.12
3.76
3.61
3.98
1.47
1.67
1.98
0.64
0.78
2.78
3.40
2.81
1.22
0.80
0.56
1.21
0.63
0.50
0.31
1.00
0.52
0.86
1.73
4.36
2.62
2.90
13.23
4.14
1.50
4.39
0.87
0.91
0.89
1.95
2.66
6.35
2.15
4.07
2.07
2.51
1.88
RoA (%)
RoE (%)
Buy
Buy
Buy
Neutral
Buy
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
Buy
1,388
553
814
366
726
303
146
135
964
297
1,054
341
817
36.1
37.6
69.5
7.9
25.7
30.7
29.4
24.0
58.1
8.4
34.1
27.5
45.2
38.4
44.7
86.2
9.8
37.7
35.6
35.3
25.5
77.9
11.1
44.6
32.0
43.2
200
211
281
28
175
202
168
149
495
112
166
158
201
225
247
316
34
209
228
195
167
557
117
204
179
244
FY18 FY17 FY18 FY17 FY18
1.27 1.12 1.03 10.4 9.9
3.43 1.88 1.88 18.6 19.3
1.94 0.60 0.93 6.3 10.3
3.27 1.65 1.78 14.2 15.4
3.01 1.83 1.85 22.1 22.6
3.45 1.85 1.85 15.5 16.4
1.38 1.11 1.06 7.4 8.9
1.54 0.78 0.76 9.4 10.4
1.76 0.94 0.92 10.9 11.8
0.59 -1.47 0.69 -21.1 11.6
0.72 0.55 0.54 9.7 10.0
2.52 2.59 2.04 11.3 9.9
3.03 1.05 1.20 12.6 14.4
2.52
1.12 0.44 0.52 7.5 9.2
0.75 0.21 0.36 3.9 6.8
0.53 -0.09 0.27 -2.4 7.0
1.10 0.41 0.58 8.1 11.5
0.59 0.23 0.31 4.9 7.2
0.46 0.14 0.45 2.8 9.7
0.30 0.09 0.26 1.7 4.8
0.92 0.70 0.69 10.4 10.2
0.50 0.08 0.31 1.4 5.8
0.82
1.60
3.47 2.40 2.35 19.6 19.6
2.24 1.47 1.52 19.1 19.5
2.57 3.41 3.22 26.0 28.9
10.90 2.29 2.41 31.0 32.1
3.48 1.85 2.19 15.7 19.6
1.33 1.24 1.21 16.6 16.6
3.91
0.75 2.63 2.68 18.8 19.5
0.81 2.37 2.12 16.8 16.2
0.78
1.73 2.15 2.66 12.3 14.7
2.53 1.18 1.35 7.7 9.7
5.17 3.44 3.41 22.5 24.1
1.91 3.59 3.45 18.4 19.0
3.35 7.25 4.69 30.0 19.4
1.87
2.23
1.72
Source: MOSL, Company
10 February 2017
14

State Bank of India
Financials and Valuations
Income Statement (Standalone)
Y/E March
Net Interest Income
Change (%)
Non Interest Income
Net Income
Change (%)
Operating Expenses
Pre Provision Profits
Change (%)
Provisions (excl tax)
PBT
Tax
Tax Rate (%)
PAT
Change (%)
Cons. PAT post MI
Change (%)
Balance Sheet
Y/E March
Equity Share Capital
Reserves & Surplus
Net Worth
Deposits
Change (%)
of which CASA Dep
Change (%)
Borrowings
Other Liab. & Prov.
Total Liabilities
Current Assets
Investments
Change (%)
Loans
Change (%)
Fixed Assets
Other Assets
Total Assets
Asset Quality
GNPA (INR m)
NNPA (INR m)
GNPA Ratio
NNPA Ratio
PCR (Excl Tech. W/O)
PCR (Incl Tech. W/O)
E: MOSL Estimates
2013
443,293
2.4
160,368
603,661
4.7
292,844
310,817
-1.6
111,308
199,509
58,459
29.3
141,050
20.5
179,162
16.8
2014
492,822
11.2
185,529
678,351
12.4
357,259
321,092
3.3
159,353
161,739
52,827
32.7
108,912
-22.8
141,738
-20.9
2015
550,152
11.6
225,759
775,911
14.4
380,539
395,373
23.1
202,233
193,140
62,124
32.2
131,016
20.3
169,943
19.9
2016
568,818
3.4
281,584
850,402
9.6
417,824
432,578
9.4
294,838
137,741
38,234
27.8
99,507
-24.0
122,246
-28.1
2017E
596,346
4.8
354,243
950,589
11.8
475,625
474,964
9.8
336,782
138,182
38,000
27.5
100,182
0.7
66,871
-45.3
2018E
679,213
13.9
349,273
1,028,486
8.2
524,756
503,729
6.1
307,187
196,543
58,963
30.0
137,580
37.3
167,782
150.9
(INR Million)
2019E
767,361
13.0
386,360
1,153,721
12.2
579,448
574,273
14.0
307,549
266,724
80,017
30.0
186,707
35.7
229,186
36.6
(INR Million)
2019E
7,764
2,077,736
2,085,500
25,170,069
13.0
11,292,549
10.9
2,861,095
2,192,626
32,309,290
1,705,089
9,052,921
10.0
19,622,953
14.0
442,806
1,485,521
32,309,290
(%)
814,647
408,031
4.07
2.08
49.9
76.8
2013
6,840
981,997
988,837
12,027,396
15.2
5,390,634
15.3
1,691,827
954,053
15,662,113
1,148,202
3,508,775
12.4
10,456,166
20.5
70,050
478,920
15,662,113
2014
7,466
1,175,357
1,182,822
13,944,085
15.9
5,984,004
11.0
1,831,309
964,130
17,922,346
1,325,496
3,983,082
13.5
12,098,287
15.7
80,022
435,459
17,922,346
2015
7,466
1,276,917
1,284,382
15,767,932
13.1
6,519,051
8.9
2,051,503
1,376,980
20,480,798
1,547,558
4,817,588
21.0
13,000,264
7.5
93,292
1,022,097
20,480,798
2016
7,764
1,434,982
1,442,745
17,307,224
9.8
7,375,531
13.1
2,241,906
1,598,755
22,590,630
1,674,677
4,770,973
-1.0
14,637,004
12.6
103,893
1,404,084
22,590,630
2017E
7,764
1,840,764
1,848,527
20,249,453
17.0
9,187,101
24.6
2,464,193
1,628,029
26,190,202
2,112,317
7,156,459
50.0
15,368,854
5.0
429,304
1,123,267
26,190,202
2018E
7,764
1,940,430
1,948,193
22,274,398
10.0
10,184,103
10.9
2,648,530
1,887,944
28,759,065
1,589,458
8,229,928
15.0
17,213,117
12.0
434,805
1,291,757
28,759,065
511,894
219,565
4.76
2.10
57.1
66.6
616,050
310,961
4.97
2.57
49.5
62.9
567,249
275,906
4.27
2.12
51.4
69.1
981,724
558,070
6.52
3.81
43.2
60.7
1,097,387
617,426
6.92
4.02
43.7
63.4
1,006,013
557,251
5.70
3.24
44.6
68.6
10 February 2017
15

State Bank of India
Financials and Valuations
Ratios
Y/E March
Spreads Analysis (%)
Avg. Yield-Earning Assets
Avg. Yield on loans
Avg. Yield on Investments
Avg. Cost-Int. Bear. Liab.
Avg. Cost of Deposits
Interest Spread
Net Interest Margin
Profitability Ratios (%)
RoE
RoA
Consolidated RoE
Consolidated RoA
Non Int. Inc./Net Income
Efficiency Ratios (%)
Cost/Income*
Empl. Cost/Op. Exps.
Busi. per Empl. (INR m)
NP per Empl. (INR lac)
* ex treasury and recoveries
Asset-Liability Profile (%)
Loans/Deposit Ratio
CASA Ratio
Investment/Deposit Ratio
G-Sec/Investment Ratio
CAR
Tier 1
Valuation
Book Value (INR)
BV Growth (%)
Price-BV (x)
Consol BV (INR)
BV Growth (%)
Price-Consol BV (x)
Adjusted BV (INR)
Price-ABV (x)
Adjusted Consol BV
Price-Consol ABV (x)
EPS (INR)
EPS Growth (%)
Price-Earnings (x)
Consol EPS (INR)
Con. EPS Growth (%)
Price-Consol EPS (x)
Dividend Per Share (INR)
Dividend Yield (%)
E: MOSL Estimates
2013
9.0
9.5
8.2
5.9
6.0
3.0
3.3
15.9
1.0
16.3
0.9
26.6
50.3
62.8
93.7
6.4
2014
8.8
9.1
8.5
5.9
6.0
2.9
3.2
10.5
0.6
11.1
0.6
27.4
55.6
63.0
107.8
4.8
2015
8.8
9.0
8.0
5.8
6.0
3.0
3.2
11.2
0.7
11.9
0.7
29.1
53.1
61.9
125.9
6.0
2016
8.6
8.4
8.8
5.7
6.0
2.9
3.0
7.6
0.5
7.8
0.4
33.1
54.1
60.1
144.2
4.7
2017E
8.1
8.0
8.0
5.4
5.6
2.7
2.8
7.0
0.4
3.9
0.2
37.3
58.6
59.0
162.6
4.8
2018E
7.8
7.8
7.5
5.2
5.4
2.6
2.8
9.0
0.5
9.2
0.5
34.0
56.6
58.0
180.8
6.6
2019E
7.7
7.6
7.5
5.1
5.2
2.6
2.8
11.3
0.6
11.5
0.6
33.5
55.1
56.9
202.9
9.0
86.9
44.8
29.2
76.7
12.9
9.5
139
14.8
2.0
177
14.8
1.5
117
2.4
147
1.8
20.6
18.2
13.4
26.2
14.6
10.1
4.2
1.5
86.8
42.9
28.6
77.4
12.4
9.7
150
7.8
1.8
188
6.5
1.4
121
2.3
149
1.8
14.6
-29.3
18.9
19.0
-27.5
13.1
3.0
1.1
82.4
41.3
30.6
78.4
12.0
9.6
164
8.9
1.7
207
10.0
1.3
138
2.0
172
1.6
17.5
20.3
15.7
22.8
19.9
11.7
3.5
1.3
84.6
42.6
27.6
75.5
13.1
9.9
178
8.7
1.6
222
7.2
1.2
128
2.2
159
1.7
12.8
-27.0
21.5
15.7
-30.8
16.9
2.6
0.9
75.9
45.4
35.3
63.9
12.2
9.1
189
6.3
1.2
229
3.1
1.0
134
1.7
143
1.6
12.9
0.7
17.3
8.6
-45.3
25.9
1.4
0.5
77.3
45.7
36.9
61.0
11.7
9.0
203
7.2
1.1
247
7.7
0.9
153
1.5
169
1.3
17.7
37.3
12.6
21.6
150.9
10.3
3.5
1.3
78.0
44.9
36.0
62.5
11.2
8.7
221
9.1
1.0
271
9.7
0.8
185
1.2
214
1.0
24.0
35.7
9.3
29.5
36.6
7.6
4.8
1.7
10 February 2017
16

State Bank of India
Corporate profile
Company description
SBI is the oldest and the largest bank in India.
Government of India owns 61.3 per cent of the bank’s
equity capital. The SBI group offers a wide range of
banking products and services. Through its non-banking
subsidiaries and joint venture companies, it offers a wide
range of financial services, such as merchant banking,
fund management, factoring, primary dealership,
broking, investment banking, credit cards, life insurance,
and general insurance. The bank has ~16k branches and
~58k ATM spread across the country.
Exhibit 1: Sensex rebased
Source: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Dec-16
Promoter
DII
FII
Others
60.2
19.4
10.9
9.6
Sep-16
60.2
19.3
11.1
9.5
Dec-15
60.2
18.4
12.1
9.3
Source: Capitaline
Exhibit 3: Top holders
Holder Name
LIFE INSURANCE CORPORATION OF INDIA
HDFC TRUSTEE COMPANY LIMITED- HDFC
EQUITY FUND
RELIANCE CAPITAL TRUSTEE CO. LTD A/C
RELIANCE EQUITY OPPORTUNITIES FUND
NA
NA
% Holding
9.8
2.4
1.5
0.0
0.0
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Arundhati Bhattacharya
B Sriram
Dinesh Kumar Khara
Parveen Kumar Gupta
Rajnish Kumar
V G Kannan
Designation
Chairman
Managing Director
Managing Director
Managing Director
Managing Director
Managing Director
Exhibit 5: Directors
Name
Deepak I Amin
Sanjiv Malhotra
Anjuly Chib Duggal
Pushpendra Rai
Name
Mangalore Devdas Mallya
Sunil Mehta
Girish Kumar Ahuja
Urjit R Patel
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Amit Ray & Co
B Chhawchharia & Co
Bansal & Co
Brahmayya & Co
Chatterjee & Co
Type
Statutory
Statutory
Statutory
Statutory
Statutory
Source: Capitaline
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
FY19
MOSL
forecast
12.9
17.7
24.0
Consensus
forecast
11.6
20.5
29.4
Variation (%)
10.8
-13.8
-18.5
Source: Bloomberg
10 February 2017
17

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