SBI to share Q2 results today; key things to watch

State-run lender State Bank of India is expected to report 9-30 per cent year-on-year (YoY) surge in net profit for the September quarter on 5-7 per cent rise in net interest income (NII) during the same period. Net interest margin (NIM) is expected to contract sequentially. Credit costs may continue to normalise, while asset quality may stay steady, analysts said.

All eyes would be on SBI's commentary on capital adequacy and outlook on loan book growth and return ratios, they said.

Sharekhan forecast SBI Q2 profit at Rs 16,119 crore compared with Rs 14,330 crore in the year-ago quarter, up 12.5 per cent. It sees NII growing 5.6 per cent YoY to Rs 41,722 crore from Rs 39,500 crore YoY. Pre-provision operating profit (PPOP) is seen climbing 34.1 per cent to Rs 26,037 crore from Rs 19,417 crore.

PL Capital sees SBI's bottom line at Rs 15,603 crore, up 8.9 per cent YoY. It sees NII rising 7.2 per cent YoY to Rs 42,362 crore. PPOP is seen jumping 26 per cent to Rs 24,538 crore.

Axis Securities sees profit for the PSU bank growing 12.2 per cent YoY at Rs 16,074 crore on 4.9 per cent rise in NII at Rs 4,142 crore. "Advances and deposits growth may remain healthy, C-D Ratio may remain broadly stable QoQ. NII growth may be soft; NIMs are likely to witness marginal compression QoQ. Opex ratios are likely to inch up marginally QoQ, and PPOP growth could be flat sequentially," the brokerage said.

YES Securities, meanwhile, expects the largest state-run bank to report 30.6 per cent YoY growth in net profit at Rs 18,711 crore on 6.4 per cent YoY rise in NII at Rs 42,012 crore.

"Sequential loan growth will be in the 3 per cent ballpark due to idiosyncratic growth trajectory. NII growth will be slightly slower than average loan growth due to rise in cost of deposits outpacing yield on advances. Consequently, NIM will be slightly lower sequentially," YES Securities said.

Analysts expect SBI to report a lower fee income growth sequentially than loan growth due to seasonality. Opex growth could slightly lag business growth. Slippages and provisions could be lower on sequential basis due to seasonality.