All eyes on SBI, ICICI Bank results today

All eyes on SBI, ICICI Bank results today
PTI
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First Published: Sun, Oct 26 2008. 11 25 PM IST
Updated: Sun, Oct 26 2008. 11 25 PM IST
Mumbai: In the midst of an unprecedented credit turmoil gripping economies across the world, the markets will keenly watch the second quarter earnings of the country’s two largest lenders—State Bank of India (SBI) and ICICI Bank Ltd —on Monday.
The focus is on ICICI Bank for its exposure to some of the crisis-ridden institutions in the US including Lehman Brothers Holdings Inc. SBI’s results will also be watched, as being the largest lender of the country it would serve a benchmark indicator for the entire sector.
Both the banks are set to announce their earnings after a 1,071-point plunge in the benchmark Sensex, its second largest fall. SBI had earlier said it has a “negligible” exposure of $5 million (Rs25 crore today) to Lehman Brothers, while ICICI Bank had mark-to-market (MTM) losses of $93 million at the end of the first quarter. MTM is an accounting practice of valuing an investment in accordance with its market value and not the cost at which it was bought.
If the repeated assurances from the management of the two banks that they were on a sound footing and the impact of global crisis was negligible come true, it could turn out to be a major trigger for the beaten-down domestic bourses, which are keenly waiting for any positive cues.
During Q1, SBI had reported 15% rise in its net profit to Rs1,640.79 crore, against Rs1,425.81 crore in the same period previous fiscal. ICICI Bank’s net profit dropped 6% to Rs728 crore from Rs775 crore in the year-ago quarter.
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First Published: Sun, Oct 26 2008. 11 25 PM IST