SBI Q2 Results Live Updates: State Bank of India (SBI), the country’s largest lender, announced its September quarter results today, November 4. SBI reported an 8% year-on-year (YoY) growth in its Q2FY24 standalone net profit at ₹14,330 crore. The lender’s net interest income during the quarter ended September 2023 increased 12.3% YoY to ₹39,500 crore. SBI’s domestic net interest margin (NIM) for Q2FY24 decreased by 12 bps YoY to 3.43%. Asset quality improved sequentially.
India's largest commercial bank, State Bank of India (SBI) released its July-September quarter results on Saturday. SBI reported an 8% year-on-year jump in the net profit as it grew from ₹13,264.5 crore in Q2FY23 to ₹14,330 crore in the quarter under review. The net interest income (NII) of the State Bank of India jumped 12.3% compared to the same period last year, reaching ₹39,500 crore. Additionally, there was a 21.6% growth in other sources of income, bringing it to ₹10,790 crore. Read full report here
SBI’s provisions in Q2FY24 stood at ₹115.3 crore versus ₹3,039 crore YoY and versus ₹2,501 crore, QoQ.
A look at SBI’s Balance Sheet in Q2FY24:
- Credit growth at 12.39% YoY with Domestic Advances growing by 13.21% YoY
- Foreign Offices’ Advances grew by 8.11% YoY
- Domestic Advances growth driven by SME Advances (22.75% YoY) followed by Retail Personal Advances which grew by 15.68% YoY
- Foreign Office advances cross ₹5 lakh crore
- Agri and Corporate loans registered YoY growth of 14.76% and 6.62% respectively
- Whole Bank Deposits grew at 11.91% YoY out of which CASA Deposit grew by 4.91% YoY
- CASA ratio stands at 41.88% as on 30th September 2023
SBI’s credit cost for Q2FY24 improved by 6 bps YoY to 0.22%. The bank’s credit growth during the quarter was 12.39% YoY.
SBI’s key ratios in Q2FY24:
- Provision Coverage Ratio (PCR) at 75.45% declined by 248 bps YoY
- Slippage Ratio increased by 13 bps YoY to 0.46%
- Capital Adequacy Ratio (CAR) improved by 77 bps YoY to 14.28%
- CET-1 Ratio up 41 bps at 9.94%
- Tier-1 ratio up 66 bps at 11.78%
SBI’s Pre-Provision Operating Profit (PPoP) for the quarter ended September 2023 declined by 8.07% to ₹19,417 crore from ₹21,120 crore, YoY
SBI’s domestic net interest margin (NIM) for Q2FY24 decreased by 12 bps YoY to 3.43%. Domestic NIM for H1FY24 increased by 6 bps YoY to 3.45%.
SBI’s gross NPA as a percentage of gross advances during the September 2023 quarter declined 21 basis points (bps) to 2.55% from 2.76% in the June 2023 quarter.
Net NPA ratio, or net NPA as a percentage of net advances, in Q2FY24 fell 7 bps to 0.64% from 0.71%, QoQ.
SBI’s asset quality during the quarter ended September 2023 improved sequentially. The bank’s gross non-performing assets (GNPA) in Q2FY24 fell 4.8% to ₹86,974.08 crore from ₹91,327.84 crore in Q1FY24.
Net Non-Performing Assets (NNPA) decreased 7.1% to ₹21,352.4 crore from ₹22,995 crore, QoQ.
SBI’s net interest income (NII) in Q2FY24 rose 12.3% to ₹39,500 crore from ₹35,183.4 crore in the year-ago quarter.
SBI reported net profit growth of 8% YoY at ₹14,330 crore in the quarter ended September 2023.
Earnings growth is likely to remain robust for Public Sector Banks in Q2FY24, aided by controlled credit costs, though margins may moderate due to rising funding costs. PSBs are likely to deliver NII/PPoP growth of 12%/8% YoY and PAT growth of ~20% YoY. Opex is likely to remain elevated as banks provide for wage revisions. Treasury performance should be sluggish during the quarter due to an increase in bond yields after a robust 1QFY24, according to Motilal Oswal Financial Services.
Loan growth should recover on a sequential basis, led by improved corporate demand and ongoing traction in the retail and MSME segments. Asset quality improvement is likely to continue, while healthy PCR and a sharp decline in SMA asset pool will lead to further moderation in credit costs, the brokerage firm said.
SBI could outperform Bank of Baroda on net interest margin (NIM) given higher CASA and unsecured share and more headroom available for growth due to lower LDR at 71.4% vs 80.3% for BoB. Valuation gap between BoB and SBI has narrowed which should widen. Valuation is attractive at 1.2x on core FY25E ABV, brokerage firm Prabhudas Lilladher said. It retained a ‘Buy’ rating on SBI with a target price of ₹770 per share.
SBI’s net profit in the first quarter of FY24 jumped 178.25% YoY to ₹16,884 crore. Its net interest income (NII) in April to June 2023 quarter rose 24.71% YoY, while domestic net interest margin (NIM) increased by 24 bps YoY to 3.47%.
SBI reported that its Operating Profit for Q1FY24 grew by 98.37% YoY to ₹25,297 crore from ₹12,753 crores during Q1FY23. Bank’s ROA and ROE for the quarter stood at 1.22% and 24.42% respectively. Read full Q1 Results here
SBI share price has fallen marginally over the last couple of months. SBI shares declined over 4% in the past one month, while the stock is down over 2% in three months. SBI shares have fallen more than 5% year-to-date (YTD) and they are down over 1% in the past one year.
SBI’s sequential loan growth will be in the 3.0% ballpark due to the idiosyncratic growth trajectory. Net interest income (NII) growth will be slightly slower than loan growth due to the cost of deposits catching up. Consequently, net interest margin (NIM) will be marginally lower sequentially, as per Yes Securities estimates.
Sequential fee income growth will broadly match loan growth. Opex growth will slightly lag loan growth. Slippages would be broadly stable on a sequential basis. Provisions will be higher sequentially due to low base in the first quarter and prudential provisioning, the brokerage firm said.
SBI is estimated to report a 9% rise in total income at ₹48,218.9 crore in Q2FY24 as compared to ₹44,057.4 crore, YoY, as per Nuvama Institutional Equities. It expects Pre-Provision Operating Profit (PPoP) to remain stable at ₹21,139.5 crore, while net profit to rise 3% YoY to ₹13,620.7 crore.
We expect a sharp fall in trading gains. Loans to grow under 2% QoQ and NIM is likely to decline by 6 bps, said the brokerage firm.
Emkay Global Services expects some margin contraction for SBI in Q2FY24 coupled with lower treasury gains to lead to moderation in profitability. It expects slippages to moderate QoQ, while recovery from Q1 NPAs should lead to moderation in NPAs.
According to brokerage firm Prabhudas Lilladher, SBI’s net interest income (NII) is expected to grow marginally by 0.5% QoQ while loan growth seen at 3.0% for the quarter. Margin could moderate by 11 bps sequentially; PPoP to decline sharply by 23.6% QoQ on account of lower treasury income. Asset quality to improve further by 19 bps sequentially with stable credit costs.
SBI is expected to report Q2 slippages at around 1.5% of loans (lower impact from PSL in 2QFY24) as the overall loans are holding up well, as per Kotak Institutional Equities. We are likely to see lower recovery and upgrades as well, the brokerage firm said.
Key discussion would be net interest margin (NIM), RoE, unsecured loans and CAR for the quarter, it added.
Kotak Institutional Equities expects SBI’s operating profit growth to be flat YoY on higher operating expenses and net interest margin (NIM) pressure. It is building in 10% YoY net interest income (NII) growth on the back of 12% YoY loan growth.
We are building net interest margin (NIM) to decline 10 bps QoQ but do see a possibility of stable performance, given the structure of the loan book and negligible need for deposits to fund this growth, Kotak Institutional Equities said.
SBI’s asset quality in the quarter ended September 2023 is expected to improve sequentially. The lender’s gross non-performing assets (GNPA) as a percentage of gross advances in Q2FY24 are expected to drop by 19 basis points (bps) to 2.58% from 2.76% in the previous quarter. Net NPA ratio, or net NPA as a percentage of net advances, is likely to remain flat sequentially at 0.7% during the quarter.
SBI’s net interest income (NII) in Q2FY24 is likely to rise 10.7% year-on-year (YoY) on the back of 12% loan growth. NII is estimated to be at ₹38,948 crore in the quarter ended September 2023 as against ₹35,183.4 crore in the year-ago quarter.
Net interest margin (NIM) during the quarter is expected to contract by 10 basis points (bps) sequentially.
The public sector lender SBI is expected to report a net profit of ₹13,569 crore for the second quarter of FY24, witnessing a moderate growth of 2.3% from ₹13,264.5 crore in the same quarter of last fiscal year, as per average estimates of five brokerages.
The bank’s Pre-Provision Operating Profit (PPoP) in Q2FY24 is expected to grow 0.9% to ₹21,299.7 crore from ₹21,119.6 crore, YoY.
The public sector lender SBI is expected to report a net profit of ₹13,569 crore for the second quarter of FY24, witnessing a moderate growth of 2.3% from ₹13,264.5 crore in the same quarter of last fiscal year, as per average estimates of five brokerages. SBI’s net interest income (NII) in Q2FY24 is likely to rise 10.7% year-on-year (YoY). Read full preview here
SBI is expected to report a subdued quarter with a marginal rise in net profit and net interest income (NII), while net interest margin (NIM) is likely to be under pressure. The bank may see improvement in asset quality sequentially supported by a low stressed asset pool, while credit costs are likely to remain stable.
State Bank of India (SBI), the country’s largest lender, is set to announce its September quarter results today, November 4.