Citi re-initiates coverage on SBI with ‘buy’ rating, sets Rs 1,050 target price

Core Viewpoint - Citi has re-initiated coverage on State Bank of India (SBI) with a 'Buy' rating and a target price of Rs 1,050, reflecting a bullish outlook on the bank's growth potential and operational efficiencies [7]. Group 1: Growth Drivers - SBI is experiencing strong traction in its Xpress Credit segment, a growing corporate loan pipeline, and a renewed focus on the home loan segment, which are expected to support robust loan growth [1][7]. - For FY26–FY27E, Citi projects loan growth of 13–14% year-on-year, with net interest margins (NIMs) on interest-earning assets likely to remain in the 2.8–2.9% range [2][7]. Group 2: Financial Metrics - Citi forecasts a return on assets (ROA) at 1% and return on equity (ROE) in the range of 14–15%, indicating efficient capital utilization and improved profitability [5][7]. - Credit costs are expected to remain benign at 40–45 basis points, which supports the bank's financial outlook [2][7]. Group 3: Market Position - Citi has identified SBI as its preferred pick among public sector banks, underscoring confidence in the bank's ability to deliver sustainable growth and value in the evolving banking landscape [6][7]. - Despite some risks, Citi's outlook remains constructive, indicating a strong belief in SBI's operational capabilities [6][7].