After two years, ICICI Bank outpaces SBI in terms of market-cap

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Updated: May 26, 2016 9:13:58 AM

After a period of two years — ICICI bank, the country’s largest private sector lender, has outpaced State Bank of India in terms of market capitalisation on Wednesday, reports fe Bureau in Mumbai.

icici bank shares, sensexAlthough the banking space in general has faced selling pressure in the last one month, the relative underperformance of SBI compared to ICICI bank has led to this topple. Since April 26, the SBI stock has lost nearly 13% of its value while ICICI bank has declined 8% during the period.(Reuters)

After a period of two years — ICICI bank, the country’s largest private sector lender, has outpaced State Bank of India in terms of market capitalisation on Wednesday, reports fe Bureau in Mumbai.

The market value of private lender stood at `1.36 lakh crore which is `380 crore more than the state-lender. Shares of SBI which is scheduled to announce the March quarter results on Friday gained 3.3% while ICICI bank advanced 4.5% to end the session at `234.45 per share.

Although the banking space in general has faced selling pressure in the last one month, the relative underperformance of SBI compared to ICICI bank has led to this topple. Since April 26, the SBI stock has lost nearly 13% of its value while ICICI bank has declined 8% during the period.

GRAPH

For banks, especially the PSBs, as the ongoing earning season has failed to bring a respite in terms of asset quality woes, the SBI stock seems to be reflecting the street’s concerns on its Q4FY16 numbers. So far 21 state lenders together have posted a loss of `19,865 crore with Punjab National Bank posting highest ever loss in the tune of `5,367.14 crore.

Analysts expect SBI financials to reflect the general industry trend – under pressure margins and elevated incremental stress in the January-March quarter. However, as per Edelweiss the headline asset quality numbers may not be as bad given that Q4 is generally strong in terms of recovery. SBI reported slippages of close to `15,000 crore in Q3FY15 and guided for a similar provisioning in Q4FY16 as it implements RBI’s AQR (asset quality review) mandate.

On the other hand, ICICI Bank which reported a 76% decline in y-o-y net profit had disclosed that approximately `44,100 crore of loans or 4.8% of the total exposure, across sectors, is rated below investment grade internally. The bank’s asset quality deteriorated with gross non-performing assets (NPAs) rising to 5.8% and net NPAs going up to 3%.

 

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