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Stocks of major banks are seen trading with a negative bias in the coming sessions, after sector major State Bank of India disappointed investors by posting lower-than-expected earnings for Jan-Mar. On Thursday, SBI posted an 18.5% year-on-year decline in net profit for Jan-Mar at 32.99 bln rupees. The bank's earnings were dragged down by higher provision costs due to continued stress on asset quality and low net interest income. Considering lower exit quarter NIMs (net interest margins) with limited trigger for near-term improvement, coupled with muted fee income we revise earnings downward by 8% for FY14/15 (2013-14, 2014-15). However, conscious efforts towards quality growth can help stabilise asset quality and contain credit costs. Stocks of Lakshmi Vilas Bank may be closely eyed, as the bank will detail its Jan-Mar earnings on Monday.
