Goldman Sachs downgrades SBI shares to 8216;sell8217;

Goldman Sachs downgrades State Bank of India SBI to 8220;sell8221; from 8220;neutral8221; and cut its target price to 1,900 rupees from 2,420,citing concerns over the lender8217;s stress levels and the company8217;s desire to grow its loanbook.

Goldman says SBI could post a 8220;tough8221; year in fiscal 2014 given expectations the lender will continue to face margin pressure over its 8220;aggressive8221; lending strategy.

Goldman further expects stress loan formation to remain elevated,especially if the economy weakens,while it sees SBI8217;s operating expenses increasing due to provisions for pensions.

Last week,SBI posted its first quarterly net profit drop in two years.

SBI8217;s shares were up 0.4 percent as of 0739 GMT.