SBI shares gain 3% on nod to acquire SBI Pension Fund

The shares of State Bank of India (SBI) surged 2.3 percent in early trade on June 28 after the Executive Committee of the Central Board (ECCB) gave its nod to acquire the entire 20 percent stake held by SBI Capital Markets in SBI Pension Funds.

SBI Pension Fund is the largest pension fund manager in India with around 37 percent market share as of May 31, 2023.

At 10:32am, SBI was trading at Rs 572 apiece, up 3 percent from the previous close on the National Stock Exchange. In the last one year, the largest public sector lender has given a 23 percent return, on the back of improving asset quality and net interest margin.

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The positive sentiment was also fuelled after S&P increased its rating for the stand-alone credit profiles (SACPs) of SBI, following its assessment. S&P is a stock market index, tracking the stock performance of 500 of the largest companies.

SBI’s net profit increased 83 percent in the quarter ended March 2023 to Rs 16,694 crore as compared with  Rs 9,113 crore in the corresponding quarter of the previous year.

During the quarter ended March 2023, the net interest income (NII) of the bank witnessed a significant growth of 29.5 percent year-on-year (YOY), reaching Rs 40,392 crore, compared to Rs 31,197 crore in the same period last year. Additionally, the domestic net interest margin (NIM) for Q4FY23 improved by 44 basis points (bps) YoY, standing at 3.84 percent.

The bank trimmed its gross non-performing assets (NPA) by 7.5 percent to Rs 90 crore from Rs 90 crore in the same quarter of the last fiscal year.

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