First-time buyers account for almost 94 per cent of home loans in State Bank of India (SBI), which adds about 1.1 million savings account customers every month, Motilal Oswal Financial Services said in a research note.
The average balance in the savings account is approximately Rs 50,000 across digital and physically acquired customers, Motilal Oswal said after an interactive session with SBI Chairman Dinesh Kumar Khara.
“A recession, if any, will be shallow, and thus rates won’t come down meaningfully,” it said.
The bank is also looking to launch YONO 2.0 soon, a digital bank offering different products and services under one platform, including insurance, mutual funds and credit card.
“Savings account balance increases by about 50 per cent within the first six months of opening an account,” it said.
Noting that SBI’s earnings momentum is on track, Motilal Oswal said it expects loan growth to sustain at 14-16 per cent in FY2023.
“Loan growth remains healthy, led by retail loans and a pick-up in the corporate segment. The housing segment remains strong (disbursement up 35 per cent year-on-year), with falling unsold inventory levels,” it said.
In the corporate segment, working capital utilisation/new sanctions grew 54 per cent/46 per cent, driven by term loans and loans to non-banking finance companies, oil majors and the infrastructure sector. Renewables, which have been its major focus area, led to growth in the infrastructure sector.
“There has been a moderation in loan growth in 3QFY23. Nevertheless, it expects a loan growth of 14-16 per cent in FY23, while growth in FY24 will depend on the global macro environment,” it said.
Even as deposit costs may increase, a high mix of floating loans, which will benefit from the re-pricing, will aid earnings.
The note said asset quality performance remains strong, and the restructured book remains under control.
Motilal Oswal expects 32 per cent earnings over FY22-24.
SBI shares were trading at Rs 606.20, up 1.19 per cent from Tuesday’s close.
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