When considering stocks for long-term investments, a number of factors come into play. It is not as simple as just investing in one stock and letting that investment sit for years together.
The process begins with the selection of the stock which in itself is a big task. Then, the stock’s performance has to be monitored so that we can see whether the stock is gaining at price or not.
When considering long-term investment plans, it is important to select a company that has been in business for a long time. Another thing to consider is whether the company is ahead of its rivals or not. Two other things that are to be considered are the performance of the company and the plans it has for the future.
If the company is not prepared for the future, then it is highly likely that the stock price will go down sooner or later. Therefore, it is important to select trusted institutions. An Indian institution that inspires that level of trust in the public is SBI. It has been around for a long time.
The bank has recently performed really well. The bank has processes and ideas in place for the future. Therefore, it checks most of the boxes that mention prerequisites for selecting a good stock to invest in, in the long term.
History of SBI
Today’s State Bank of India began as the Bank of Calcutta in the early 19th century. It was later renamed the Bank of Bengal and was part of a trio of Presidency banks which included the Bank of Bombay and Bank of Madras. The first merger of these banks was in the year 1921.
The bank that was formed via this merger was known as the Imperial Bank of India. In 1955, the Reserve Bank of India (RBI) acquired a controlling stake in the bank and in the same year, the Imperial Bank of India was renamed as the State Bank of India.
SBI has been involved in the purchase of several local banks. The different associate banks of State Bank of India were all merged together into the single entity known as SBI.
SBI’s performance in recent times
As of the second week of September 2018, the bank’s market capitalization is about Rs.2,50,000 crore. This has helped the bank be part of the elite NIFTY Bank index. This index consists of the twelve largest banks in India by free-float market capitalization.
SBI’s performance in recent times has given a lot of hope to investors. Its performance numbers are one of the best when it comes to a comparison of Indian nationalized banks. The interest income earned by the bank in the first quarter of the FY19 was an increase of 23.8% over the interest income earned in the corresponding period in the previous financial year.
The bank’s interest income derived from loans that were granted increased by about 7.5%. The bank also saw an increase in the operating income and operating profit in the first quarter of the financial year 2018–2019 compared to the financial year 2017–2018.
Most important of all, the gross NPA (non-performing assets) of the bank decreased. This indicates that the bank is on track to performing well.
How SBI is ready for the future
Considering the fact that most transactions in the future will be through mobile phones and digital banking gateways, the bank has established a number of online facilities for the public.
As a consequence, the bank has seen an increase of 5% in digital transactions. This led to digital transactions being the dominant mode of transactions, constituting an all-time high of 82% of all transactions.
In addition to this, the bank is betting big on the coming generations to grow the bank and its influence. The bank still has a number of untapped opportunities which can yield it large benefits. For instance, the Life Insurance segment is yet to roll out to a number of places in India.
Considering the fact that SBI is one of the very institutions to have a presence virtually everywhere in India, and that in some cases it is the sole institution for a large area, the potential for the growth of the life insurance division is tremendous.
The bank’s large customer base can also help it in the quest to improve sales of its life insurance division. In order to tap younger talent, the bank has tied up with a number of top-ranking institutions around the country giving it the opportunity to cherry-pick candidates it prefers.
Towards the close of the month of August 2018, SBI’s stock was trading at just over Rs.300. The stock experienced a slight dip in prices over the course of the beginning of September 2018. SBI is one of the oldest banks in India, with a number of foreign branches, high levels of trust across the country, and has over 42 crore customers.
The bank also offers a wide variety of services from investment banking to personal wealth management among other things.
Considering all the facts presented thus far, as far as performance is concerned, SBI is poised to perform really well in the coming days. Therefore, it could potentially be a good investment in the long term even if the stock does not appear to be doing extremely well at present.
The website like Bankbazaar.com provides information on SBI historical share price. Going through will help investors on how SBI Stocks perform daily.