SBI Q4 Earnings Preview: Core income growth likely to be the highest in five years
The market will closely scrutinize the management's commentary on the growth outlook and provisions for expected credit losses (ECL).
State Bank of India (SBI) is set to release its financial results for the fourth quarter on May 18, and analysts predict that it will witness the highest net interest income (NII) growth in the last 21 quarters.
Market experts are particularly interested in whether the net interest margin will remain stable at around 3.50 percent compared to the previous quarter.
According to a CNBC-TV18 poll, NII is expected to grow by 26.3 percent year-on-year and approximately 3.8 percent sequentially. Profit growth is projected to be 65.2 percent year-on-year and about 6.7 percent on a sequential basis.
Leading brokerage firm Kotak Securities estimates that the bank's gross slippage will be around Rs 11,500 crore, while PhillipCapital expects the net slippage (after accounting for recoveries) in the same quarter to be around Rs 4,000 crore, compared to Rs 3,200 crore in the previous quarter.
Kotak Securities predicts a 25 percent year-on-year growth in operating profit, primarily driven by the strong expected NII growth.
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There is optimism regarding asset quality, with PhillipCapital estimating the gross non-performing asset (NPA) ratio to be around 2.9 percent, an improvement from the 3.1 percent recorded in the previous quarter.
The market will closely scrutinize the management's commentary on the growth outlook and provisions for expected credit losses (ECL).
Two important figures to watch closely are the watch lists, consisting of stressed assets categorized as Special Mention Accounts (SMA) I and II, which amount to approximately Rs 4,750 crore, representing 0.15 percent of the loans. Additionally, the movement of restructured loans, totaling about Rs 26,000 crore, will also be of keen interest.
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