Global brokerage Citi has reaffirmed its bullish stance on India’s banking sector, retaining its ‘Buy’ recommendations on State Bank of India (SBI) and RBL Bank. The brokerage has issued attractive target prices, citing healthy growth prospects and improving fundamentals in both lenders.
SBI remains Citi’s top pick among PSU banks
Citi has reiterated its ‘Buy’ rating on SBI with a target price of Rs 1,050 per share, well above the current market price of Rs 861.35, down 0.56 per cent on Thursday. The brokerage expects India’s largest public sector bank to deliver steady loan growth of 13–14 per cent annually through FY27, supported by business expansion and stable asset quality.
It also forecasts net interest margins in the range of 2.8–2.9 per cent and controlled credit costs of 40–45 basis points, signalling strong profitability. Citi believes SBI can generate a return on assets of about 1 per cent and a return on equity of 14–15 per cent by FY27, making it its preferred pick among PSU banks.
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RBL Bank showing signs of a turnaround
For RBL Bank, Citi has maintained a ‘Buy’ rating with a target price of Rs 300 compared to the current market price of Rs 275.60, up 1.94 per cent on Thursday. The brokerage notes that net interest margins appear to have bottomed out in the first quarter and could improve from the second quarter onwards. It also highlights faster growth in secured retail and commercial lending, improvement in the microfinance portfolio and easing stress in joint liability groups.
Investor interest rising
SBI’s shares have gained more than 14 per cent in the past five trading sessions and over 12 per cent in six months. RBL Bank’s stock has risen nearly 55 per cent over the same period. Citi says the ongoing growth momentum and strengthening balance sheets make both banks attractive options for long-term investors.
