State Bank of India rose 0.73% to Rs 308.95 at 10:20 IST after the bank's chairman Arundhati Bhattacharya reportedly said lending rates will come down when credit picks up and the cost of funds come down.
Meanwhile, the BSE Sensex was down 44.14 points, or 0.16%, to 27,752.73.
On BSE, so far 3.37 lakh shares were traded in the counter, compared with an average volume of 7.09 lakh shares in the past one quarter.
The stock hit a high of Rs 309.45 and a low of Rs 303 so far during the day. The stock hit a 52-week high of Rs 327.10 on 1 December 2014. The stock hit a 52-week low of Rs 145.60 on 14 February 2014.
Shares of PSU bank had outperformed the market over the past one month till 8 December 2014, rising 14.22% compared with 0.9% rise in the Sensex. The scrip had also outperformed the market in past one quarter, rising 22.16% as against Sensex's 2.93% rise.
Meanwhile, State Bank of India (SBI) has reportedly on Tuesday, 9 December 2014, launched its SBI Composite Index which will predict the direction of Index of Industrial Production (IIP) at least two months in advance based on the growth of bank's loan book along with other indicators like exchange rates, financial markets, commodity prices, exports and imports and inflation, among others.
The fact that we are adjusting on the deposit taking side means that going forward all of us are seeing a rate cut. But exactly when it will happen is not something I can really tell you now, Bhattacharya reportedly said after launching the SBI Composite Index.
What the banks are waiting for is a little bit more of a sign of a credit pick-up. Whatever we say, when we cut the lending rates our income comes down and we need some other ways of making up that income to keep paying interest on deposits. That can always happen if the credit growth is quite robust and volume picks up, she said.
But when the volumes are very thin and if you are not seeing that kind of a clear pipeline, then it is very difficult to cut lending rates. So, I think most of us are waiting to see a little bit more of a pick-up in credit, Bhattacharya said.
The credit growth is slowly inching up and is definitely better than the growth up to September, she said. Retail growth is alright. On the corporate side also we are seeing a little bit growth now, though new projects are still a challenge, she said.
SBI's consolidated net profit rose 31% to Rs 4023.84 crore on 15% rise in total income to Rs 61098.67 crore in Q2 September 2014 over Q2 September 2013.
The Government of India holds 58.6% stake in the bank as at 30 September 2014.
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