NIM expansion, loan growth: Top 5 things to track in SBI's Q4FY23 results

SBI Q4 result preview: According to Bloomberg's consensus estimate, SBI may see net profit growth of 66.6 per cent YoY/7 per cent QoQ to Rs 15,186 crore

State Bank of India (SBI) Q4FY23 results preview: India's largest state-owned lender State Bank of India (SBI) is set to report its January to March quarter result on Thursday, May 18.

The bank, brokerages estimate, may report up to 74 per cent year-on-year (YoY) growth in net profit, on the back of better-than-industry average of loan growth, and robust net interest income (NII).

Net interest margin (NIM), they expect, could also expand up to 10 bps due favourable loan book mix.

Here're the key things that investors need to track from the public sector bank's Q4FY23 numbers:

Net profit: According to Bloomberg's consensus estimate, SBI may see net profit growth of 66.6 per cent YoY/7 per cent QoQ to Rs 15,186 crore during the quarter under review.

Operating profit, NII: Kotak Institutional Equities expects operating profit to surge 25 per cent YoY (Rs 24,639.4 crore) led by strong NII growth. It is building 24.5 per cent YoY/2 per cent NII growth (Rs 38,856 crore).

Across brokerages, the range for NII growth varies from 26.5 per cent to 29.5 per cent YoY.

Loan, deposit growth: Analysts expect loan book to rise in the range of 15 to 17 per cent on year, up to Rs 32 trillion.

Prabhudas Lilladher, which has the estimate on the higher side, believes SBI should continue to report better NII growth of 29.5 per cent YoY due to higher-than-industry average of loan growth.

 

Deposit growth, meanwhile, is pegged at 6 per cent YoY (Rs 43 trillion) by Motilal Oswal Financial Services.

Asset quality: Analysts expect gross non-performing asset (GNPA) ratio to improve to 2.9 per cent from 3.1 per cent QoQ, while NNPA ratio may improve to 0.7 per cent from 0.8 per cent QoQ.

"We expect slippages at 1.5 per cent of loans (around Rs 11,500 crore) mostly driven by SME and retail, while corporate will continue to hold up relatively well. We should see further improvement in NPA ratios as recovery and upgrades are likely to be strong in 4QFY23," said Kotak Institutional Equities.

Those at Prabhudas Lilladher, meanwhile, expect credit cost curtailed below 1 per cent despite slippages rising.

Loss provisioning, opex outlook: Analysts will track the management's commentary on Expected Credit Loss (ECL) provisioning; opex outlook; and traction in deposits and increase in deposit costs.

Share performance: So far this calendar year, shares of SBI have slipped 4.4 per cent, as against 0.99 per cent rise in the Nifty50 index, and 2.13 per cent gain in the Nifty Bank index.