NEW DELHI: State Bank of India (SBI) is likely to report a 50 per cent year-on-year (YoY) surge in its December quarter net profit on a single-digit growth in net interest income (NII). Net interest margin (NIM) is seen flat year-on-year YoY, but slippages may rise in the SME segment sequentially, analysts said.
Prabhudas Lilladher expects the PSU bank to report a 52.6 per cent YoY rise in net profit at Rs 7,927.90 crore compared with Rs 5,196.20 crore in the same quarter last year. NII is seen growing 7.9 per cent YoY at Rs 31,085 crore compared with Rs 28,819.90 crore in the year-ago quarter. Gross NPA is pegged at 4.55 per cent of total advances compared with 4.77 per cent YoY; margins are seen at 3.1 per cent compared with 3.12 per cent YoY.
“SBI should continue to report a decent NII growth of 8 per cent YoY in line with loan growth of 5.7 per cent YoY. We build higher slippages particularly from the SME segment, although expect credit cost below 1 per cent,” PL said.
ICICIDirect expects loan growth of 6.7 per cent YoY at Rs 26.1 lakh crore and deposits growth at 9 per cent YoY. It sees NII growing at 6.5 per cent YoY to Rs 30,600 crore. Non-interest income is seen improving sequentially to Rs 8,600 crore.
“We factor in normalised slippages at Rs 6.000-7.000 crore, after strong Q2 and expect a sequential decline in gross NPA ratio to 4.68 per cent. Overall provisions are expected at Rs 8,800 crore. Hence, PAT is likely to grow to at Rs 6,919 crore, up 50 per cent YoY,” the brokerage said.
Analysts noted that SBI’s net slippages were significantly lower in the second quarter despite being the first quarter after the second Covid-19 wave.
“In the current quarter, we believe, the bank will continue to do well on asset quality, though slippages/credit costs will be higher than in the previous quarter. We expect strong sequential loan growth at 3.5 per cent QoQ, mainly led by the retail and SME segments. On a YoY basis, loan growth should be 6.8 per cent. The margin had one-offs related to interest on IT refund last quarter. Adjusted for this, we expect margins to remain broadly flat QoQ at 3.06 per cent,” Morgan Stanley said in a note.
This brokerage expects net interest income, adjusted for IT refund, at 5 per cent YoY. Led by better sequential core revenue growth and muted cost growth, core PPoP growth will accelerate to 11 per cent YoY, the brokerage said.
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