SBI rallies 10% in two days on expectation of improvement in asset quality

The stock rallied 6% to Rs 269, extending its Tuesday's 4% gain on the BSE.

Shares of State Bank of India (SBI) have rallied 6% to Rs 269 per share, extending their 4% gain on the BSE on Tuesday, on expectations of improvement in asset quality of the state-owned bank.

“While gross slippages for FY18 were high at around Rs 1 trillion (5.2% of advances), management’s watchlist of accounts (Rs 25.8 billion) is a low 13% of advances and lends comfort on asset quality,” analyst at BOB Capital Markets said in result review.

“With non-performing assets (NPA) recognition largely behind us, we expect slippages to normalise at 2% of advances in FY19 and