BackSBI Q4 results preview: Strong PAT growth trend to continue, NIM may soften; key factors to watch
SBI Q4 results preview: SBI will be announcing its March 2023 quarter earnings report on May 18. Expectations of a dividend announcement is taking round as well.
PremiumSBI Q4 results preview: The largest public sector lender of country, State Bank of India is set to announce its fourth-quarter results for FY23 on May 18th. SBI's stock is in focus this week accordingly. In Q4FY23, SBI's NII growth is expected to stay healthy, while the bottom-line front may extend its record-high performance. Margins are likely to improve, while gross NPA may further go down on the back of better recoveries.
In the third quarter of FY23, SBI posted a record-high net profit of ₹14,205 crore, up by 68% YoY. Net interest income (NII) surged by 24% YoY to ₹38,068 crore. While net interest margin (NIM) for Q3FY23 increased by 29 bps YoY to 3.69%.
As of December 31, 2023, SBI's gross NPA eased to 3.14% from 3.52% a quarter earlier. Its net NPA stood at 0.77% as compared to 0.80% quarter-on-quarter (QoQ). The provisions and contingencies slipped to ₹5,760 crore versus ₹3,038 crore QoQ and ₹6,974 crore YoY.
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What to expect from SBI's Q4 preview?
In its preview note, ICICI Direct Research said on SBI, “credit growth expected at 15% YoY to ₹31,591 billion basing out post strong 18-20% growth in last two quarters. W estimate deposit growth at 9.6% YoY with the cost of funds stabilising."
Overall, the brokerage expects NII growth to stay strong at ~23% YoY to ₹38500 crore. Expects slippages at ₹4,000 crore with overall NPA provisions seen at ₹45 billion. Also, it expects a strong profit growth trend to continue with a surge of 65% YoY and 6.4% QoQ to ₹15,114 crore.
Also, Gaurav Jani – Research Analyst, Prabhudas Lilladher said, "SBI should continue to report better NII growth of 29.5% YoY & 6.1%, while loan growth would be higher than the industry at 4.7% QoQ."
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Further, Jani expects slippages to go up, however credit costs below 1%. He also expects SBI's margins to improve by 6-7 bps sequentially.
Along the lines, Emkay Global also in its note said, "some softness in NIMs and higher opex, including PLI, are expected to soften profit sequentially. Moderate slippages and better recoveries are likely to drive down NPAs."
Lastly, chances of SBI announcing dividend for FY23 fiscal is high as other peers who have announced their Q4 reports have done the same.
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.
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