SBI shares gain ahead of Q2 results: Key expectations, earnings preview

State Bank of India is all set to report a double digit rise in net profit at Rs 22,621 crore for the September quarter, consensus data compiled by Bloomberg on 26 analyst estimates suggested. As per estimates, net interest income (NII) is seen coming in at Rs 48,570 crore, provisions for the quarter are estimated at Rs 5,559 crore, while gross non-performing assets are seen at 1.45 per cent of total advances. Analysts see return on assets (RoA) may come in at 1.18 per cent. Tier 1 ratio is estimated at 14.3 per cent. Capital adequacy ratio is pegged at 16 per cent. Ahead of its earnings, SBI shares were up 1.06 per cent at Rs 997.50.

MOFSL said net interest margin (NIM) for SBI may dip 3 basis points (bps) sequentially to 2.83 per cent only amid lower quantum of FCNR(B) mobilised as a percentage of its deposits. 
It said provisioning buffers could be strengthened with gains from SBI MF and NSE stake sale.

"Credit growth is seen at 3.8 per cent QoQ, led by broad-based growth in SME, corporate, agri, and Xpress credit. Expect deposit growth at 4.4 per cent QoQ. Expect steady credit cost and RoA trajectory excluding one-offs," MOFSL said.

Kotak Institutional Equities expects operating profit for SBI to grow 5 per cent YoY. It noted that the base quarter included one-off stake sale of YES Bank.

"We are building in 13 per cent YoY NII growth, led by 18 per cent YoY loan growth. NIM likely to be flat qoq with negligible impact from FCNR deposits mobilized. We are building in slower fee income growth and accounting for the stake sale gains from the NSE," it said.

Kotak said slippages may come in at 1.1 per cent of loans but no fresh concerns are likely in any portfolio for the bank.

"We are likely to see lower recovery and upgrades as well. Key discussion would NIM progression for the quarter," it said.