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Banks 

India 
Credit Update 
State Bank of India 

Ratings  Rating Rationale
Current · The ratings of State Bank of India (SBI) reflect its strong financial position
Ratings among Indian banks, together with its quasi‐sovereign risk status as India’s
Foreign Currency largest bank, with huge systemic importance.
Long‐Term IDR BBB‐
Short‐Term IDR F3 · The infusion of INR167bn (USD4.2bn) through a rights issue in March 2008
National
boosted SBI’s equity by nearly 50% while maintaining the government’s
Long‐Term AAA(ind) shareholding at 59%. This helped maintain the bank’s Tier 1 and total capital
ratios above those of most government banks, even after the total capital ratio
Individual C
Support Rating 2
was adversely affected by about 1.5 percentage points due to the
Support Rating Floor BBB‐ implementation of Basel II at end‐March 2008 and write‐downs of equity for
additional provisions for pension liabilities.
Sovereign Risk
Long‐Term IDR BBB‐ · After improving during the benign credit environment until FY07, SBI’s reported
Short‐Term IDR F3 
gross NPL ratio deteriorated in the last quarter of FY08 (FY08: 3.04%; FY07:
2.92%,) reflecting the pressures of rising costs on borrowers, particularly in the
Outlook  SME (18% of loans) and consumer (21% of loans) segments. The government‐
Foreign Long‐Term IDR Stable
National Long‐Term Stable sponsored waiver scheme for agriculture loans could help write off some of the
Sovereign Foreign Long‐Term Stable  NPLs in this sector (20% of total NPLs), although delinquencies appear to be
IDR increasing since the announcement of the scheme. The bank expects better
loan monitoring to help control delinquencies in consumer loans. Recoveries
Financial Data  from NPLs could be affected, however, if property prices were to correct, and
State Bank of India  the bank’s relatively low loan loss reserves (42% of gross NPLs in FY08) may
31 Mar 08 31 Mar 07 need to be strengthened.
Total assets (USDbn) 180.5 129.9
Total assets (INRbn) 7,214.8 5,665.7 · Profitability in FY08 was boosted by increased fee income and trading in equity.
Total equity (INRbn) 489.9 313.0 Fee income is stronger than at other government banks due to SBI’s dominant
Net income (INRbn) 67.3 45.4
ROA (%) 1.04 0.86
market share in the government and remittance businesses; income from the
ROE (%) 16.76 15.41 distribution of investment products through the branches has been growing from
Capital adequacy (%) 12.64 12.34 a small base. RoA could be affected in FY09 if trading income were to fall off,
Tier 1 ratio (%) 8.48 8.01 
or there were pressure on the net interest margin or any increase in loan loss
and marked‐to‐market provisions on the government securities portfolio.
Analysts 
· Owing to its quasi‐sovereign status and extensive reach, SBI has access to huge
Ananda Bhoumik
+91 22 4000 1720 low‐cost and stable customer deposits.
ananda.bhoumik@fitchratings.com
Support
Arshad Khan
+91 224 000 1733
· SBI is India’s largest bank, with more than 15% of the banking system’s deposits.
arshad.khan@fitchratings.com Confidence in the banking industry would collapse if it failed, so Fitch believes
there is a high probability of support from the government. 
Ambreesh Srivastava
+65 6796 7218
ambreesh.srivastava@fitchratings.com Key Rating Drivers
· SBI’s Long‐Term Foreign Currency IDR is driven by its Individual Rating and is at
the Support Floor. A downgrade of the Individual Rating would be linked to
inability of the risk management systems to handle loan growth and is unlikely. 
Profile 
With more than 10,000 branches and 8,500 ATMs, SBI continues to dominate the
banking sector in India. Mergers with the seven associate banks with strong regional
presence would increase SBI’s loans by 45%, but face employee resistance.
Subsidiaries in the asset management, investment banking, life insurance and credit
card businesses have leading market shares in the domestic market. 

www.fitchratings.com  29 May 2008 


Copyright © 2008 by Fitch, Inc. and Fitch Ratings, Ltd. and its subsidiaries. One State Street Plaza, NY, NY 10004 Telephone: 1‐800‐753‐4824, (212) 908‐0500. Fax: (212) 480‐4435. Reproduction or retransmission in whole or in
part is prohibited except by permission. All rights reserved. All of the information contained herein has been obtained from sources Fitch believes are reliable, but Fitch does not verify the truth or accuracy of the information.
The information in this report is provided 'as is' without any representation or warranty of any kind. A Fitch rating is an opinion as to the creditworthiness of a security, not a recommendation to buy, sell, or hold any security. 
Banks
Balance Sheet Analysis
STATE BANK OF INDIA 
31 Mar 2008  31 Mar 2007  31 Mar 2006  31 Mar 2005
Year End  Year End  As % of  Average  Year End  As % of  Year End  As % of  Year End  As % of 
USDm  INRm  Assets  INRm  INRm  Assets  INRm  Assets  INRm  Assets 
Original  Original  Original  Original  Original  Original  Original  Original  Original  Original 
A. LOANS 
1. Guaranteed by Banks/Govt  5,065.0  202,447.6  2.81  209,819.3  217,191.0  3.83  209,780.6  4.25  76,623.8  1.67 
2. Secured  71,111.1  2,842,310.6  39.40  2,611,541.9  2,380,773.1  42.02  1,844,434.6  37.35  1,545,061.7  33.60 
3. Unsecured  29,448.4  1,177,053.9  16.31  999,929.9  822,805.9  14.52  608,504.1  12.32  464,254.0  10.10 
4. (Loan Loss Reserves)  1,354.3  54,130.1  0.75  50,767.6  47,405.0  0.84  46,304.0  0.94  62,195.0  1.35 
TOTAL A  104,270.3  4,167,682.0  57.77  3,770,523.5  3,373,365.0  59.54  2,616,415.3  52.98  2,023,744.5  44.01 
B. OTHER EARNING ASSETS 
1. Deposits with Banks  3,985.9  159,317.1  2.21  179,957.8  200,598.4  3.54  229,073.0  4.64  225,117.7  4.90 
2. Government Securities  35,308.5  1,411,282.7  19.56  1,296,995.5  1,182,708.3  20.88  1,352,913.9  27.39  1,719,435.1  37.39 
3. Other Securities  6,222.1  248,695.7  3.45  196,040.0  143,384.2  2.53  150,205.1  3.04  181,512.5  3.95 
4. Investments in Subs & Joint Ventures  1,095.9  43,802.6  0.61  34,768.2  25,733.7  0.45  24,032.5  0.49  17,673.7  0.38 
5. Other Investments  4,784.4  191,231.7  2.65  165,447.2  139,662.6  2.47  98,191.0  1.99  52,357.8  1.14 
TOTAL B  51,396.8  2,054,329.8  28.47  1,873,208.5  1,692,087.2  29.87  1,854,415.5  37.55  2,196,096.8  47.75 
C. TOTAL EARNING ASSETS (A+B)  155,667.0  6,222,011.8  86.24  5,643,732.0  5,065,452.2  89.41  4,470,830.8  90.53  4,219,841.3  91.76 
D. FIXED ASSETS  844.0  33,735.0  0.47  30,961.8  28,188.6  0.50  27,529.4  0.56  26,977.0  0.59 
E. NON­EARNING ASSETS 
1. Cash and Cash Equivalents  12,893.3  515,346.1  7.14  417,217.4  319,088.6  5.63  216,527.0  4.38  168,103.3  3.66 
2. Other  11,102.1  443,749.8  6.15  348,336.4  252,923.0  4.46  223,808.3  4.53  183,907.1  4.00 
F. TOTAL ASSETS  180,506.4  7,214,842.7  100.00  6,440,247.6  5,665,652.4  100.00  4,938,695.5  100.00  4,598,828.7  100.00 
G. DEPOSITS & MONEY MARKET FUNDING 
1. Demand  21,471.1  858,201.2  11.89  784,216.4  710,231.6  12.54  609,821.4  12.35  492,843.4  10.72 
2. Savings  38,586.3  1,542,292.9  21.38  1,416,829.0  1,291,365.0  22.79  1,127,239.2  22.82  949,071.6  20.64 
3. Time  69,546.1  2,779,756.5  38.53  2,488,743.9  2,197,731.3  38.79  1,941,433.9  39.31  2,091,553.9  45.48 
4. Inter­bank Deposits  4,848.4  193,788.9  2.69  174,836.0  155,883.0  2.75  121,966.0  2.47  137,006.5  2.98 
5. Other borrowing  12,941.6  517,274.1  7.17  457,153.8  397,033.4  7.01  306,412.4  6.20  191,843.1  4.17 
TOTAL G  147,393.4  5,891,313.6  81.66  5,321,778.9  4,752,244.3  83.88  4,106,872.9  83.16  3,862,318.5  83.98 
H. OTHER FUNDING 
1. Long­term Borrowing  n.a.  n.a.  ­  n.a.  17,388.0  0.31  276.1  0.01  289.7  0.01 
2. Subordinated Debt  4,699.0  187,818.4  2.60  166,062.7  144,306.9  2.55  49,582.0  1.00  34,358.7  0.75 
3. Hybrid Capital  627.3  25,075.0  0.35  21,231.5  17,388.0  0.31  0.0  0.00  0.0  0.00 
I. OTHER (Non­int. bearing)  15,529.9  620,729.6  8.60  521,034.7  421,339.7  7.44  505,523.6  10.24  461,140.4  10.03 
J. LOAN LOSS RESERVES (see A above)  1,354.3  54,130.1  0.75  50,767.6  47,405.0  0.84  46,304.0  0.94  62,195.0  1.35 
K. OTHER RESERVES  n.a.  n.a.  ­  n.a.  n.a.  ­  n.a.  ­  n.a.  ­ 
L. EQUITY  12,256.8  489,906.1  6.79  401,445.8  312,985.5  5.52  276,440.9  5.60  240,721.4  5.23 
M. TOTAL LIABILITIES & EQUITY  180,506.4  7,214,842.7  100.00  6,440,247.6  5,665,652.4  100.00  4,938,695.5  100.00  4,598,828.7  100.00 
Exchange Rate  USD1 = INR 39.9700  USD1 = INR 43.5950  USD1 = INR 44.6050  USD1 = INR 43.7550 

State Bank of India


May 2008  2 
Banks
Income Statement Analysis
STATE BANK OF INDIA 
31 Mar 2008  31 Mar 2007  31 Mar 2006  31 Mar 2005 
Income  As % of  Income  As % of  Income  As % of  Income  As % of 
Expenses  Total AV  Expenses  Total AV  Expenses  Total AV  Expenses  Total AV 
INRm  Earning Assts  INRm  Earning Assts  INRm  Earning Assts  INRm  Earning Assts 
Original  Original  Original  Original  Original  Original  Original  Original 
1. Interest Received  489,503.0  8.67  384,542.3  8.06  345,149.3  7.94  323,519.9  8.19 
2. Interest Paid  319,290.8  5.66  234,368.2  4.92  201,592.9  4.64  184,833.8  4.68 
3. NET INTEREST REVENUE  170,212.2  3.02  150,174.1  3.15  143,556.4  3.30  138,686.1  3.51 
4. Other Operating Income  86,838.9  1.54  74,346.3  1.56  73,867.3  1.70  71,207.4  1.80 
5. Personnel Expenses  77,871.0  1.38  79,336.6  1.66  81,242.7  1.87  69,083.4  1.75 
6. Other Non­interest Expenses  48,215.1  0.85  38,898.5  0.82  36,008.2  0.83  31,658.4  0.80 
7. PRE­PROVISION OPERATING PROFIT  130,965.0  2.32  106,285.3  2.23  100,172.8  2.31  109,151.7  2.76 
8. Provision for Loan Losses  20,009.4  0.35  14,282.6  0.30  1,529.7  0.04  12,040.0  0.30 
9. Provision for diminution in investments  ­886.8  ­0.02  10,199.5  0.21  27,632.5  0.64  22,623.4  0.57 
10. Other Provisions  7,563.8  0.13  5,673.7  0.12  10,136.3  0.23  6,962.6  0.18 
11. OPERATING PROFIT AFTER PROVISIONS  104,278.6  1.85  76,129.5  1.60  60,874.3  1.40  67,525.7  1.71 
12. Other Non­operating Income  110.4  0.00  121.3  0.00  19.5  0.00  ­8.3  0.00 
13. Exceptional Items  n.a.  ­  n.a.  ­  n.a.  ­  n.a.  ­ 
14. PRE­TAX PROFIT  104,389.0  1.85  76,250.8  1.60  60,893.8  1.40  67,517.4  1.71 
15. Taxes  37,097.8  0.66  30,837.7  0.65  16,827.1  0.39  24,472.2  0.62 
16. NET INCOME  67,291.2  1.19  45,413.1  0.95  44,066.7  1.01  43,045.2  1.09 

Ratio Analysis
STATE BANK OF INDIA 
31 Mar 2008  31 Mar 2007  31 Mar 2006  31 Mar 2005 
Original  Original  Original  Original 
I.  PROFITABILITY LEVEL 
1. Net Income/Equity (av.)  %  16.76  15.41  17.04  19.43 
2. Net Income/Total Assets (av.)  %  1.04  0.86  0.92  0.99 
3. Non­int. Exp/Net Interest Rev. + 
Other Operating Income  %  49.05  52.66  53.93  48.00 
4. Net Interest Rev./Total Assets (av.)  %  2.64  2.83  3.01  3.20 
5. Pre­provision Operating Profit/Total Assets (av.)  %  2.03  2.00  2.10  2.52 
6. Operating Profit After Provisions/Total Assets (av.)  %  1.62  1.44  1.28  1.56 
II. CAPITAL ADEQUACY (year end) 
1. Internal Capital Generation  %  12.97  12.48  13.79  16.04 
2. Equity/Total Assets  %  6.79  5.52  5.60  5.23 
3. Equity/Loans  %  11.75  9.28  10.57  11.89 
4. Capital/Risks ­ Tier 1  %  8.48  8.01  9.36  8.04 
5. Capital/Risks ­ Total  %  12.64  12.34  11.88  12.45 
III. LIQUIDITY (year end) 
1. Liquid Assets/Deposits & Money Mkt Funding  %  34.83  35.30  43.09  54.17 
2. Liquid Assets & Marketable Debt 
Securities/Deposits & Money Mkt Funding  %  35.87  35.93  44.65  55.66 
3. Loans/Deposits & Money Mkt Funding  %  70.74  70.98  63.71  52.40 
IV. ASSET QUALITY 
1. Provisions for Loan Losses/Loans (av.)  %  0.52  0.47  0.06  0.65 
2. Provisions for Loan Losses/Pre­prov. Operating Profit  %  15.28  13.44  1.53  11.03 
3. Loan Loss Reserves/Loans  %  1.28  1.39  1.74  2.98 
4. Loan Loss Reserves/Impaired Loans  %  42.17  47.41  44.63  49.93 
5. Gross NPL's/Loans  %  3.04  2.92  3.90  5.97 
6. Net NPL's/Equity  %  15.15  16.80  17.75  22.22

State Bank of India


May 2008  3