State Bank of India

The positive rating outlook on SBI reflects that on the sovereign. The ratings on SBI is capped by our sovereign credit ratings on India and will therefore move in tandem with those on the sovereign. We expect the public sector bank to maintain its market leadership in India's banking sector over the next two years. SBI's funding and liquidity should stay strong, supported by high customer confidence. We expect SBI's asset quality to remain better than the sector average in India and comparable with that of similar rated international peers. The bank's capitalization is likely to stay weaker than that of India's private sector banks. We continue to factor in a very high likelihood of government support if needed in

...State Bank of India (SBI) will maintain its market leadership. The bank is the largest in India and has significant geographic and product diversity. India's robust economic growth supports its loan growth, asset quality, and profitability. The bank's strong deposit franchise also underpins its credit standing. Asset quality will likely be stable over the next 12-18 months. We forecast the bank's weak loans (nonperforming loans [NPLs] and restructured loans) will stay at 2.5%-3.0% of total loans over the next 12-18 months, versus 3.0% as of March 31, 2024. Credit costs will likely remain at less than 1%. SBI's capitalization remains weaker than that of peers. The bank's risk-adjusted capital (RAC) ratio could stay moderate at 5.5%-6.0% over the next two years, versus 5.9% as of March 31, 2024. Its capitalization remains lower than that of large private banks in India....

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