Active Stocks
Wed May 22 2024 15:59:56
  1. Tata Steel share price
  2. 173.30 -0.57%
  1. ITC share price
  2. 439.75 1.10%
  1. State Bank Of India share price
  2. 819.30 -1.35%
  1. NTPC share price
  2. 373.40 0.40%
  1. Kotak Mahindra Bank share price
  2. 1,700.40 0.19%
Business News/ Companies / Company Results/  SBI Q2 Results Preview: Net profit likely to rise 2.3%, NII growth seen at 11% YoY; margin to compress
BackBack

SBI Q2 Results Preview: Net profit likely to rise 2.3%, NII growth seen at 11% YoY; margin to compress

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 Q2 Results Preview: 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.Premium
SBI Q2 Results Preview: 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.

State Bank of India (SBI), the country’s largest lender, is set to announce its September quarter results today, November 4. SBI is expected to report a subdued quarter with a marginal rise in net profit and net interest margin remaining under pressure.

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) 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.

Catch SBI Q2 Results Live Updates here

Net interest margin (NIM) during the quarter is expected to contract by 10 basis points (bps) sequentially.

The bank is expected to see improvement in asset quality sequentially supported by low stressed asset pool, while credit costs are likely to remain stable.

Also Read: UCO Bank Q2 Results: Net profit declines 20% to 402 crore

“We expect operating profit growth to be flat YoY (higher operating expenses and NIM pressure). We are building in 10% YoY NII growth on the back of 12% YoY loan growth. We are building 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.

(Exciting news! Mint is now on WhatsApp Channels :rocket: Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!)

On the asset quality front, SBI’s gross non-performing assets (GNPA) in the September quarter of FY24 are expected to drop by 19 bps to 2.58% from 2.76%, QoQ. Net NPA ratio is expected to remain flat sequentially at 0.7%.

The bank’s deposit growth in Q2FY24 is estimated at 9.3% while loan growth is expected to be 13.3% YoY.

“We expect slippages at 1.5% of loans (lower impact from PSL in 2QFY24) as the overall loans are holding up well. We are likely to see lower recovery and upgrades as well. Key discussion would be NIM, RoE, unsecured loans and CAR for the quarter," Kotak Institutional Equities said.

Also Read: IDFC Q2 Results: Net profit falls 51% to 21.6 crore, revenue down 43% to 33 crore

Emkay Global Financial Services expects some margin contraction coupled with lower treasury gains to lead to moderation in profitability for SBI during the quarter. It expects slippages to moderate QoQ, while recovery from Q1 NPAs should lead to moderation in NPAs. 

Brokerage firm Motilal Oswal Financial Services expects higher operating expenses for SBI due to increased investment, while credit costs to remain in control.

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.

On Friday, SBI shares ended 1.09% higher at 578.15 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 04 Nov 2023, 08:06 AM IST
Next Story footLogo
Recommended For You