Despite SBI reporting Rs 77-bn loss in Q4, worst is likely over for PSBs

Balance sheet clean-up boosts investor confidence, experts expect earnings to improve in FY19

Despite the country's largest lender, State Bank of India (SBI), reporting its biggest quarterly loss of Rs 77 billion and a worsening of asset quality during January-March 2018 (Q4) on Monday, the Nifty index of PSU banks surged 2.8 per cent on Tuesday. The gains came on a day the Nifty and the Sensex fell by almost 1 per cent each. According to experts, even though the Q4 numbers of PSBs that have announced results so far are weaker than expected, earnings visibility is emerging and, in all probability, asset quality worries of PSBs have peaked.

Disasterous quarter

With various developments in