SBI's profit surge masks deeper concerns for investors. India's largest lender posted ₹83,299 crore annual profit, second only to Reliance, driven by robust 15% loan growth in corporate and retail segments. However, the stock plummeted 7% as margin compression emerged as a critical headwind. Net interest margin contracted to 2.93% from 3.14% year-over-year, squeezing profitability despite higher loan volumes. Treasury losses compounded concerns, with bond investments swinging from ₹6,879 crore gain to ₹1,471 crore loss in Q4. Management remains optimistic, targeting 13-15% credit growth and maintaining 3% NIM if rates stabilize. Yet rising bond yields and tightening spreads signal challenging times ahead for India's banking sector profitability.
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