SBI's shares ended Friday Rs 1.5 down at 158.25 on the BSE, while the benchmark Bombay index closed 0.75 per cent down at 3,729.12 points. The stock is 46 per cent off its year high of 293, and trading close to its year's low of 155.10.

"The stock is undervalued. But I don't see any near term upside due to worries over economic slowdown," a dealer at a domestic brokerage said. SBI's credit growth, usually viewed by analysts as a barometer of the overall economy, rose 9.1 per cent to Rs 9,800 crore in the six months to September 30, reversing a fall of Rs 200 crore in the same period last year.

The loan growth is likely to cheer investors disappointed by an industrial slowdown in the first five months of the fiscal year.

Analysts were unsure how much SBI would have to provide towards depreciation on its investments in government bonds after a hike in interest rates in July.

Bond yields rose after the central bank hiked the benchmark bank rate and short-term repo rates as part of its measures to defend the rupee. "Provisions is a grey area. After the interest rate rise in July, SBI which has a large portfolio of government securities, would have been badly affected," an analyst at a foreign brokerage said. Analysts said the bank would also be helped by revised investment valuation guidelines introduced by the Reserve Bank of India (RBI) in its credit policy review earlier this month. The RBI increased the number of categories under which banks' investments could be classified. Analysts say the new rules will result in lower provisions by banks.