Based on these assumptions, Citi expects SBI to deliver a return on assets (ROA) of around 1% and a return on equity (ROE) of 14-15% during FY26-FY27E.
The brokerage added that SBI remains its top pick among public sector undertaking (PSU) banks.
Meanwhile, six state-run banks, including SBI, are likely to see passive inflows from MSCI indices if the foreign institutional investor (FII) limit in these lenders is raised to 26% from the current 20%.SBI, where FII shareholding stands at 10%, could alone receive inflows worth $466 million, according to estimates by Nuvama Alternative.
On the earnings front, SBI reported its June quarter (Q1FY25) results on August 8. While profitability improved year-on-year, core income came in below expectations. The lender posted a net profit of ₹19,160 crore, aided largely by higher other income.
Net Interest Income (NII) or core income remained flat at ₹41,072.4 crore. Asset quality stayed stable, with gross non-performing assets (NPA) at 1.83% versus 1.82% in the previous quarter, and net NPA unchanged at 0.47%. Fresh slippages for the quarter rose to ₹7,945 crore from ₹4,222 crore in the preceding quarter.
Shares of SBI ended Wednesday’s session 0.51% lower at ₹866.15, but remained close to their 52-week high, having gained 8% in the past month.
