State Bank of India Ltd (SBI) began the new financial year on a somewhat dull note. The key reason: A sharper contraction in net interest margin (NIM) in the June quarter (Q1FY24). Small wonder, shares of the public sector lender almost closed 3% lower on Friday.
Amid higher cost of funds, as deposits got repriced, SBI’s NIM fell by 27 basis points (bps) sequentially to 3.3%. This was a negative surprise as the margin was expected to improve a bit due to the lagged repricing of MCLR-linked loans. One basis point is one-hundredth of a percentage point. Jefferies India analysts noted that since December 2022, while ICICI Bank and HDFC Bank have raised 1-year MCLR by 45 bps, SBI has taken a lower hike of 25 bps probably to retain/gain market share. “While some of the recent hike (5 bps in past three months) may absorb cost pressure, we still lower our FY24 NIM forecast a bit to factor weaker margin trends," said Jefferies analysts in a report dated 4 August.
Diese Geschichte stammt aus der August 07, 2023-Ausgabe von Mint Mumbai.
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Diese Geschichte stammt aus der August 07, 2023-Ausgabe von Mint Mumbai.
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