Largest public sector lender in India, SBI on Tuesday received approval of the Executive Committee of the Central Board (ECCB) to acquire the entire 20% stake held by SBI Capital Markets in SBI Pension Funds. In another development, S&P upgraded its rating on assessment of the stand-alone credit profiles (SACPs) of SBI.
The stake transfer would be subject to all regulatory approvals, SBI said in a regulatory filing.
SBI Pension Fund is the largest pension fund manager out of 10 managing about ₹3,59,040.81 crores of assets under management (AUM) with around 37 per cent market share as of May 31, 2023.
The pension fund manages over 48 per cent market share of AUM in the private sector.
On BSE, SBI’s share price closed at ₹565.95 apiece, up by ₹8.85 or 1.59% on Tuesday. SBI is the largest lender in the public sector and second largest bank after HDFC Bank in terms of market share.
As of June 27, 2023, SBI’s market cap was over ₹5.05 lakh crore.
In another development, the S&P Global Ratings has revised upward assessment of the stand-alone credit profiles (SACPs) of SBI by one notch on Tuesday.
In its note, S&P said, “We revised upward our assessment of SBI’s SACP to ‘bbb’ from ‘bbb-‘ to reflect the bank’s lower credit risks and improving earnings. The bank’s risk-adjusted capital ratio should therefore stay above 5% over the next 12-24 months.”
Further, the rating agency forecasts SBI’s return on assets will stay at 0.9%-1.0% over next two years, supported by contained credit costs amid a benign credit cycle in India.
Also, S&P expects SBI to maintain its market leadership in India’s banking sector over the next two years. SBI’s funding and liquidity will stay strong, supported by high customer confidence.
In S&P’s view, SBI’s asset quality should remain better than the Indian sector average and comparable to that of similar rated international peers. SBI’s capitalization is likely to stay weaker than for Indian private sector banks.
