State Bank of India (SBI) is likely to report strong performance for the quarter ended March 2022 when it will declare its results on May 11.
Experts expect India's largest banker to report a robust on-year growth of 50 percent for the quarter and expect its net interest income (NII) to increase 16 percent over the same period last year.
According to a poll of four brokerages conducted by Moneycontrol , SBI is likely to post a net profit of Rs 10,075 crore for the quarter ended March 2022 on a NII of Rs 31,360 crore.
The bank had registered a PAT of Rs 6,451 crore during the corresponding period last year with NII coming in at Rs 27,067 crore.
The profit during the October – December period stood at Rs 8,432 crore when the bank had registered a NII of Rs 30,687 crore.
The growth is likely to be driven by healthy traction in loan growth on a sequential basis backed by modest credit costs and steady asset quality.
"Credit growth is likely to gather pace (up 4 percent QoQ / 9 percent YoY) led by sequential uptick in retail, corporate and overseas advances," a report from ICICI Securities said.
Operating profit growth is likely to be 8-14 percent on-year due to lower growth in operating expenses.
"NIM (net interest margin) will be stable at 3.2 percent QoQ; treasury income will be lower and there are no one-offs in the wage costs for the quarter," a report from Kotak Institutional Equities said.
Experts expect slippages at 2 percent of loans (Rs 13,500 crore) mostly driven by SME and retail, while corporate continues to hold up relatively well. The trends on recovery and upgradation are expected to be better during the quarter.
Gross NPA (non-performing assets) for the quarter are set to witness a decline of 80 bps year on year and a sequential decline of 30 bps. Net NPAs for the quarter are expected at 1.2 percent compared to 1.5 percent during the last year period and 1.3 percent during the previous quarter of current fiscal.
"Specific provision coverage of 71.2 percent (vs 70 percent QoQ), COVID provisions at 24 bps (Rs 6,180 crore), standard assets provisions of Rs 18,300 crore (71 bps) and other provisions of Rs 5,500 crore (~21 bps of advances) suggest adequacy of provisioning", a report from ICICI Securities said.
Rise in bond yields will weigh on treasury gain and there would be mark-down of its non-HTM (held to maturity) portfolio.
State Bank of India was trading Rs 4.35 or 0.94 percent higher from its previous close at Rs 467 at 12.10 pm on The National Stock Exchange. The stock has appreciated 27 percent during the past one year.
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