Home NewsStock Market News SBI Q3 Results Preview: Five key things to watch out for

SBI Q3 Results Preview: Five key things to watch out for

by WOOWinvest
0 comment
SBI Q3 Results Preview: Five key things to watch out for

India’s largest lender () is expected to report a solid set of numbers for the third quarter ended December, driven by stable asset quality, strong free income and dominant loan growth.

The state-owned lender’s net profit is likely to zoom by a massive 60-70%, compared with the last-year period, while net interest income (NII) too, is expected to grow in healthy double digits.

Brokerages are expecting operating profit growth of 20% year on year, led by a strong NII increase. NIM is likely to see 10 basis points improvement quarter-on-quarter.

“We expect SBI to deliver over 17% RoE aided by growth build-up, contained credit cost and improving margin profile. Absence of treasury knock is likely to support operating profit growth,”


On Thursday, SBI stock closed 0.90% higher at Rs 532.10 apiece on NSE. So far this year, the shares lost 13.08%.

Some of the key monitorables include profit and NII, deposit growth, asset quality outlook, loan book traction, slippages. Here are five key things to watch out for in the third quarter report card.

Profit growth and NIIAnalysts are pricing in massive profit growth of anywhere between 60 and 79% for the December quarter on the back of strong NII and fee income growth. For instance, Nomura sees profit rising by 79% to Rs 15,108 crore, while Axis Securities estimates the profit to rise by 62% to Rs 13,679 crore. The lender had reported a net profit of Rs 8,432 crore in the December quarter of last year and Rs 13,265 crore in the September quarter this year.

Meanwhile, NII is seen to grow over 20%. Brokerage Sharekhan sees NII at Rs 37,187 crore, higher by 21% year on year. The company had reported an NII of Rs 30,687 crore in the same quarter of last year.

Loan Book Given the strong corporate lending pipeline and retail credit momentum, analysts expect healthy traction in the loan book the quarter under review. For instance, ICICI Securities is building in loan growth of 20% year-on-year and 4% quarter-on- quarter. Another brokerage Nomura expects loan growth to be solid at 22% year-on-year, continuing the momentum seen in the first and second quarters of the current fiscal year.

Asset quality outlook Brokerages are pricing in more or less a stable asset quality during the quarter with some marginal improvement. ICICI Securities sees the net non performing assets (NPAs) to decline 58 basis points to 0.8% in the third ame quarter from 1.3% in the quarter last year. Meanwhile, the gross NPAs too are seen dropping 115 basis points to 3.4%.

SlippagesGiven seasonal agri stress, brokerages are building higher slippage run-rate of over 1%, though upgrades and recoveries will aid gross NPAs to be stable. Slippages would be seen largely from SME and retail books. Nomura expects slippages to increase of 1.3% loans, while Axis Securities sees moderation quarter-on-quarter.

Deposit growth Deposit growth is an important monitorable for the state-owned lender and

is estimating significant traction in this segment. SBI had deposits at Rs 41.9 lakh crore as of September, and they are expected to clock growth of 10% to Rs 43.2 lakh crore.

Apart from the above, other key monitorables in the quarter report card include international loans and credit costs.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

You may also like

Leave a Comment

Our Mission is to help you make better trading decisions by providing actionable investing content, comprehensive tools, educational resources and assist you in making more money in the stock market.

Latest News


Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

@2022 – All Right Reserved. Designed and Developed by WOOW Invest

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy