Profit surge shows SBI can withstand tough operating conditions: S&P

However, asset quality may slip; GNPAs could rise to 8.5%

Standard and Poor’s today said State Bank of India’s (SBI) jump in profits show resilience against downside and that the lender has the financial strength to withstand tough operating conditions in the next 12 months.

However, its asset quality profile could come under pressure. SBI’s gross non-performing loans could rise to increase to 8.5-9.5 per cent of customer loans from 5.9 per cent, including pro forma slippages over the next 12 months. In comparison, the industry average for NPLs is about 2.5-3.5 percentage points higher than SBI's.

S&P in a statement said it has forecast SBI's credit costs to be elevated at