The State Bank of India (SBI) is likely to post a profit of Rs 6,166.2 crore in the March quarter, up from Rs 3,580 crore in the same period last year, as per a Bloomberg assessment of 10 analysts.
The public sector lender will announce its Q4 FY21 and full year results on Friday, May 21.
Meanwhile, according to an Emkay Research report released on April 7, SBI should report healthy sequential credit growth, led by mortgages.
"Bhushan Power resolution should lead to provision reversal and boost profits. Slippages may remain moderate with limited bad loans in retail and no lumpy corporate barring Srei," the report noted, adding that agriculture bad loans could be on a higher side.
Analysts at Nomura forsee SBI's operating profit to rise 23.5% on year to Rs 22,804.3 crore from Rs 18,465.1 crore posted in the previous year period, while, on a quarterly basis, the public sector lender's operating profit is expected to increase 31.6% from Rs 17,333.2 crore.
ICICI Securities stated on April 8 that SBI's growth will be relatively better than the industry as the bank's competitive lending rates will help it gain market shares. Disbursements, according to the broking firm, are likely to sustain sturdy momentum across products, whether gold loans, home loans, Xpress Credit among other.
"Provisioning buffer at 55 basis points (bps), coverage of 68% and anticipated resolutions will not put much strain on credit cost and hence we expect credit cost to settle at 1.9% for FY21 vs. average of 2.7% over FY18-20," the report stated. The brokerage estimates SBI's operating profit at Rs 20,408.8 crore, up 30% YoY, whereas a cautious estimate by Emkay Global pegs it just 1% higher than the previous year at Rs 18,642.9 crore.
Analysts at brokerage Motilal Oswal are of the opinion that key performance indicators for PSBs (Public Sector Banks) will improve in Q4 spearheaded by an improvement in overall environment. Within PSBs, the broking firm expects SBI to post healthy performance aided by the resolution of Bhushan Power and Steel, which would bring about healthy revivals and a seasonally robust quarter on fee income.
Provisions and PAT
Regarding the provisions, Nomura expects them to plunge 46% YoY and 29.4% QoQ, whereas ICICI Securities projects the same to grow 10% YoY and 44% QoQ.
Nomura expects SBI's PAT (Profit after Tax) at Rs 11,822.2 crore, up 230% YoY, whereas ICICI Securities' pegs it at Rs 4,704.6 crore, up 31% YoY.
For other brokerages such as Emkay Global, Motilal Oswal Financial Services, HDFC Securities, and Kotak Institutional Equities, the bank's PAT expectation ranges from Rs 5,928.1 crore to Rs 7,660 crore, an upward projection of between 65.6% and 114% YoY from Rs 3,580.8 crore posted in Q4FY20. SBI's PAT in the December quarter of FY21 stood at Rs 5,196.2 crore.
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