Tuesday, July 8, 2008

SBI on reports of heavy notional losses on bond portfolio

State Bank of India lost 4.33% to Rs 1121 at 11:24 IST on BSE on reports it may suffer mark-to-market losses of about Rs 700 crore on its bond investments due to a fall in bond prices.
The stock hit a high of Rs 1144.90 and a low of Rs 1059.40 so far during the day. The stock had a 52-week high of Rs 2396.54 on 14 January 2008 and a 52-week low of Rs 1007 on 1 July 2008.
The bank has an equity capital of Rs 634.88 crore. Face value per share is Rs 10.
The current price of Rs 1121 discounts its Q4 March 2008 annualised EPS of Rs 119.29, by a PE multiple of 9.39.
On 26 June 2008, State Bank of India raised its benchmark prime lending rate by 50 basis points to 12.75% with effect from 27 June 2008. State Bank of India (SBI)'s decision to raise lending rate comes after the Reserve Bank of India gave a strong signal that interest rates in the economy are headed north when it on Tuesday, 24 June 2008, raised repo and cash reserve ratio (CRR) by 50 basis points each on control over 11% inflation. CRR is the proportion of deposits mobilised by banks and parked with the RBI for statutory requirement. Banks do not earn any interest on the cash reserves. Repo rate is the rate at which RBI lends money to banks.
SBI had raised about Rs 16,700 in February 2008 through a rights offer of shares. The bank had offered 1 rights share for every 5 shares held at Rs 1590 per share
SBI’s net profit rose 26.1% to Rs 1,883.25 crore on 26.7% rise in operating income to Rs 16,393.93 crore in Q4 March 2008 over Q4 March 2007.
SBI provides banking, treasury and credit management services to individual and corporate clients.

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