Over the past 3M/6M, SBI has underperformed Bankex by 8%/10% on intensifying asset quality concerns, as RBI asked banks to make higher provisions on: (1) borrowers that are standard but facing stress, (2) projects behind schedule, and (3) accounts where loan restructuring has failed.
In this backdrop, Goldman Sachs has removed SBI from Asia Pacific Conviction Buy List
The report further said,
This overhang may continue until there is clarity on the extent of the pain, thus we remove SBI from the CL but retain our Buy with a new Rs290 12-m PT.
