Why Investors like SBI over ICICI ?
Saturday, August 30, 2008There are six main reasons why investors love SBI over ICICI.
- CASA franchise of 42% provides comfort on margin sustainability for SBI.
- Asset-liability match of SBI is better
- Life Insurance: Cost ratios of SBI Life are better than ICICI Prudential Life due to its strong
bancassurance model and better agency productivity. - Asset quality risks persist for both banks, SBI's loan book is well diversified across a variety of segments; ICICI's loan book is still skewed towards retail. In the next 18 months the retail segment is likely to be more vulnerable
- SBI will continue to gain market share in both advances and deposits a ICICI's expense due to the latter's strategy of going slow.
- SBI is trading at 0.94x FY10E adjusted book, while ICICI is trading at 1.0x FY10E adjusted book
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