Industry analysis :

Banking is different from the Manufacturing industry due to so many things. First, except for General Motors, not all manufacturers are so big that the whole economy will be affected if they fail. Second, not all manufacturers keep ties to the diverse profile of the Public like Bank with is many different needs. Third, and most importantly, Raw material and final product are not the same for manufacturers.

Banking in India has existed for more than 150 years, But the sector’s development has been taking place in recent years. As digitization takes place, it’s easy for banks to keep records. Centralized systems and applications were changing banking in a big way, and that is helping Govt also. A big part of the Indian population lives under the Poverty line and giving them home, and food is like Govt duty. For that Govt need to give Subsidy much Time. Banks play a crucial role in ensuring it goes into the right hands. India is even the second-largest country by population, but still, the penetration of Banking is low.

Banking also plays a key role as it shows the economy’s strength. If the economy is Good, banks are also Good. The Asset Quality is also good.

At this time, when the banking system in India is going through many changes, banking is more critical and challenging to analyze. This is because many different types of banks are coming into Reality, like 11 payment BANK, 10 Small Bank, etc. Plus, RBI makes it open a tab for a license with new rules and regulations. So UPI puts banking in the hands of the Indian people.

In India, 26 Public Sector banks, 25 private banks, 43 foreign banks, 56 regional rural banks, and many Small cooperative banks are working. But most of them are small.

The reason why I am mentioning it all is that SBI is India’s largest Bank. After the merger with its associate banks, it will look at 25% of the Indian banking system.

Company analysis: SBI, Govt backed and Largest Lender as per Loan book and more than ₹20.5 trillion in deposit with 16300 branches and ₹17.3 trillion. The size of the deposit and the Equity base gives it an edge as a low-cost lender. The Bank is the largest lender and operates in the mortgage loan sector. Although it is also working offshore, the Profit percentage is low concerning its private peers.

The Bank also offers factoring, Asset Management, Insurance, pension, Private Equity, and Advisory services. As the largest lender, the Bank keeps exposure in many vital sectors for development like Infrastructure, Steel, and Power.

With a high Loan book, Nonperforming Assets are also going high, which is a big issue not only for whole banking but concerning SBI, the Asset Quality is looking better than other public sector banks.

SHAREHOLDING Pattern BSE Data

Financial performance and Ratio

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Prospects: Expected Merger with Bharatiya Mahila Bank and Associate Banks is a big positive as it will reduce costs for many reasons. The Merger will make SBI one of the world’s largest banks; after the Merger, Capital Adequacy and return on Assets will be a boosted as the need to keep seven different Treasury and other things. In addition, more branches and ATMs may make Synergy for banks.
It is a big positive for SBI and makes re-rating as the Asset Quality of Bank may make better.