In an interview to CNBC-TV18, SBI Chairman Arundhati Bhattacharya said the availability of liquidity is the reason for a revision in rates
Will keep reviewing other rates as well
In an interview to CNBC-TV18, SBI Chairman Arundhati Bhattacharya said the reason for a revision in rates is based on the availability of liquidity, while the credit demand has been low.
“We have lot of liquidity in the 1-3 years band, thus we thought it right to cut the rates at that end. Also given the fact that inflation trajectory seems to be in the right direction, we will still be giving a real rate of return to out investors/depositors,” she said.
Below is the transcript of Arundhati Bhattacharya’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Sonia: What was the reason for this revision and what would the impact be of this revision on the margins?
A: The reason for the revision is the fact that we have a lot of liquidity, we have not seen that kind of credit demand and therefore this is basically adjusting our asset liability management (ALM). The small increase we have seen in six months to 210 days, is also to address ALM mismatch but on one to three year we have a lot of liquidity there and therefore we thought it right that we needed to cut the rates at that end also given the fact that the inflation trajectory seems to be in the right direction, we will still be giving a real rate of return to our investors, to our depositors.
Latha: You have hiked one portion which is six to seven months but you have cut the one to three year?
A: That’s right.
Latha: I would assume that a lot more money comes in the one to three year than in the six to seven months?
Latha: Can you give us an idea, what might be the six to seven month, what proportion, is it 5 percent?
A: That would be very small. Actually, most of the deposits are in one to three year bucket.
SBI stock price
On September 16, 2014, at 09:20 hrs State Bank of India was quoting at Rs 2632.95, up Rs 8.65, or 0.33 percent. The 52-week high of the share was Rs 2833.85 and the 52-week low was Rs 1455.95.
The company’s trailing 12-month (TTM) EPS was at Rs 147.33 per share as per the quarter ended June 2014. The stock’s price-to-earnings (P/E) ratio was 17.87. The latest book value of the company is Rs 1584.34 per share. At current value, the price-to-book value of the company is 1.66.