SBI Q2 Preview: Profit After Tax Likely To Grow 58% YoY, Asset Quality To Improve

State Bank of India (SBI), which is scheduled to announce its July-September 2022 quarter results on Saturday (November 5), is likely to post a profit after tax (PAT) in the range of Rs 9,478 crore-Rs 12,063.6 crore, thus registering a growth of 56-98 per cent on a quarterly basis. On a year-on-year basis, the growth is expected to be around 58 per cent, according to estimates by brokerages.

They said loan-loss provisions and growth in other income will sway net profit of the country’s largest lender in the September 2022 quarter (Q2FY23). The bank had posted a net profit of Rs 7,626.6 crore last year (Q2FY22) and Rs 6,068.1 crore in Q1FY23.

SBI’s net interest income (NII), which is the difference between interest income earned and interest expended, may grow less than 10 per cent, both y-o-y and q-o-q, to Rs 32,681 crore-Rs 33.537.6 crore.

ICICI Securities said, “Advances are likely to grow led by uptick in retail, corporate and overseas advances. Moreover, in terms of loan mix, 75 per cent of the lending book is linked to MCLR/EBR or T-Bills and reset happens on 1st of the next month. As deposits will reprice with a lag, NIMs are expected to improve further.”

Brokerage houses also expect SBI’s asset quality to improve during the July-September 2022 period, with the gross non-performing asset (GNPA) ratio likely improving to 3.8 per cent from 3.9 per cent q-o-q, and 4.9 per cent y-o-y.

Kotak Institutional Equities said, “We expect slippages at around 1.5 per cent of loans (Rs 11,000 crore), mostly driven by SME and retail, while corporate will continue to hold up relatively well. The positive trends on recovery, and upgradation will continue in Q2FY23. Most of the provisions will be toward the reduction in headline NPL ratios.”

Provisions are expected between Rs 4,436.3 crore and Rs 7,781.5 crore, up 1 per cent-77 per cent q-o-q. They had stood at Rs 4,392.1 in the previous quarter and Rs 189.3 crore in the year-ago September 2021 quarter.

On Friday, SBI shares hit an all-time high of Rs 591 apiece on the BSE during the day. It has surged over 20 per cent so far this calendar year 2022.

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