SBI's slippages ease, but no comfort yet

While slippage ratio was down to 1.85%, operational growth was muted in Q2

Despite a lacklustre performance, the SBI stock gained over six per cent on Friday as the Street rewarded the bank for its ability to curb the slippage ratio (accretion of fresh bad loans as a percentage of total loan book) to 1.85 per cent in Q2, as against 5.38 per cent in the June quarter. 

This is the best show by SBI to curb bad loans in the past five-six quarters and has bettered peers on this front. Interestingly, provision coverage ratio also saw a sequential improvement to 65.1 per cent in Q2. 

Nonetheless, the Street’s reaction appears exaggerated as