SBI Q3 earnings preview | Net interest income expected to hit 10-quarter low
Analysts express concerns about a possible reduction in interest earnings on loans, estimating a decline of 18 to 20 basis points compared to last year and five to eight basis points compared to the last quarter.
State Bank of India (SBI) is set to disclose its Q3FY24 financial results on Saturday, February 3. According to a recent CNBC-TV18 poll, there will be a potential slowdown in the net interest income (NII) growth, making it the weakest in the last ten quarters when measured on a year-on-year (YoY) basis.
Additionally, profit growth, which traditionally sees an uptick, is anticipated to experience a decline or even register a negative return for the first time in a year-on-year comparison.
The forecasted NII growth is pegged at just 6.3% year-on-year and 2.2% sequentially.
In terms of profits, a decline of 5.9% compared to the previous year and about 7.5% compared to the last quarter is predicted.
An important factor contributing to this uncertainty is the potential need for a special provision for wages due to a recent wage revision, which may impact the overall financial figures.
Analysts also express concerns about a possible reduction in interest earnings on loans, estimating a decline of 18 to 20 basis points compared to last year and five to eight basis points compared to the last quarter.
On a positive note, the bank's lending is expected to grow by approximately 14% compared to last year and 4% compared to the last quarter, indicating potential signs of growth.
Asset quality appears to be holding steady or even improving, with the gross non-performing asset (NPA) ratio expected to improve to 2.4% from the previous quarter's 2.6%.
However, there is a concern about the bank's treasury income, which may not perform as strongly.
Kotak Securities projects an 18.3% decrease in the bank's operating profit compared to the previous year, but a potential increase of 6.2% compared to the last quarter.
Investors and industry experts are eagerly awaiting insights from the bank's management regarding its future growth plans, which will be a crucial element in shaping market sentiment and confidence in SBI's trajectory.
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(Edited by : Anshul)
First Published: Feb 2, 2024 6:03 PM IST
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