May 23, 2018 / 4:04 AM / 6 months ago

BUZZ-India's SBI hits near 3-mth high; says expects recovery in 2 years

** State Bank of India (SBI) rises as much as 5.1 pct to 266.90 rupees, its highest since March 1

** SBI said it sees recovery over next 2 years after posting a record 77.18-bln-rupee ($1.13 bln) Q4 net loss following stricter central bank rules around bad loans

** Co aims to grow loans at an annual average of 12 percent through March 2020, nearly halve its gross non-performing loan ratio, bring down provisioning costs and improve margins

** Post results on Tuesday, country’s biggest lender by assets marked a near six-week closing high after posting its best intraday pct rise since Nov. 10, 2017

** BOB Capital Markets analysts retain “buy” rating on expectations of a healthy domestic credit growth outlook for the bank, backed by its dominant market share and likely improvement in asset quality; PT of 345 rupees

** Credit Suisse expects pre-provision profits to grow 15 pct by FY19. With NPL cover low at 50 pct, credit costs will normalise only by FY20 despite moderate net slippage forecast in FY19; Cut EPS by 3-20 pct on higher provisions

** Morgan Stanley expects NIMs to improve, helped by higher rates (strong deposit franchise) and NPL recoveries

** Morgan Stanley retains “overweight” rating with PT of 360 rupees, Credit Suisse cuts TP to 322 rupees from 381 rupees with “outperform” rating ($1 = 68.0100 Indian rupees)

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