SBI Q2 results preview: Profit may rise upto 17%, provisions could shoot up

SBI Q2 preview: SBI, India's biggest state-owned bank, is scheduled to report its financial results for quarter-ended (Q2 FY25) and half-year ended (H1 FY25) on September 30, 2024 on November 8, 2024

SBI Q2 results 2024 date, preview: State Bank of India (SBI) is estimated to report at least a 10-per cent year-on-year (Y-o-Y) rise in net profit for the July-September (Q2) quarter of financial year 2024-25 (FY25). At the most, the profit could rise 17 per cent Y-o-Y, brokerages predicted.

 

Sequentially (quarter-on-quarter), however, SBI Q2 results may be weak due to softness in treasury income, lower recoveries, and muted loan growth, they said.

 

SBI Q2 results 2024 date

SBI, India's biggest state-owned bank, is scheduled to report its financial results for quarter-ended (Q2 FY25) and half-year ended (H1 FY25) on September 30, 2024 on Friday, November 8, 2024.

 

 

SBI previous financial results

SBI had reported a net profit of Rs 14,330 crore in the corresponding quarter of the previous financial year (Q2 FY24) and a profit of Rs 17,035.2 crore in the June quarter of the current financial year (Q1 FY25).

 

On the operational income side, SBI's Q2 FY24 net interest income (NII) stood at Rs 39,500 crore and Q1 FY25 NII was Rs 41,125.5 crore. NIMs were 3.2 per cent and 3.1 per cent for the respective quarters.

 

Pre-provision profit (PPOP) for Q2 FY24 was reported at Rs 19,416.6 crore and Rs 26,448.6 crore for Q1 FY25.

 

Further, loan book was Rs 33.45 trillion at the end of Q2 FY24, which grew to Rs 37.49 trillion at the end of Q1 FY25.

 

Deposits, meanwhile, were Rs 46.89 trillion in the last-year quarter, and Rs 49.01 trillion at the end of the previous quarter of the current financial year.

 

SBI Q2 results estimates: What analysts expect from SBI Q2 results 2024

 

Nomura

Global brokerage Nomura estimates SBI's Q2 profit to jump 17 per cent on year to Rs 16,820 crore, led by a 32 per cent surge in PPOP and 30 per cent in core PPOP at Rs 25,570 crore and Rs 22,570 crore, respectively.

 

Over the June quarter, PAT is seen falling 1 per cent, PPOP 3 per cent, and core PPOP 5 per cent.

 

Loan book, Nomura said, may rise 15 per cent Y-o-Y/3 per cent Q-o-Q to Rs 38.61 trillion, while Deposits could climb 9 per cent Y-o-Y/4 per cent Q-o-Q to Rs 50.97 trillion.

 

NIM, on the other hand, could compress 10 basis points Y-o-Y and 3 bps Q-o-Q to 3.2 per cent, it said.

 

Motilal Oswal Financial Services

According to the brokerage, SBI's earnings may moderate due to rising provision in the September quarter. It sees net profit rising 14.5 per cent Y-o-Y to Rs 16,410 crore amid a 5.3 per cent yearly growth in NII at Rs 41,600 crore.

 

The brokerage sees a sharp surge in provision to Rs 4,670 crore, up from mere Rs 115.3 crore in Q2 FY24. In Q1 FY25, provisions were Rs 3,450 crore.

 

Loan book is seen increasing 16 per cent Y-o-Y to Rs 38.8 trillion and Deposits 8.7 per cent Y-o-Y to Rs 51 trillion.

 

Asset quality, meanwhile, could improve during the quarter with gross non-performing asset (GNPA) ratio easing to 2.16 per cent from 2.21 per cent Q-o-Q, and NNPA to 0.55 per cent from 0.57 per cent Q-o-Q.

 

Prabhudas Lilladher

Analysts at Prabhudas Lilladher have a slightly lower net profit growth estimate for SBI. The brokerage sees Q2 net profit rising around 9 per cent on year, but dropping 8.4 per cent Q-o-Q to Rs 15,604 crore.

 

It sees NII rising 7 per cent Y-o-Y and 3 per cent Q-o-Q to Rs 42,362.4 crore with NIM seen at 3.02 per cent.

 

"PPOP could decline sharply by 7.2 per cent Q-o-Q to Rs 24,538.5 crore on account of increase in operating expenditure (opex) and flat other income. Provisions are expected to increase by 5 per cent Q-o-Q and over 3,000 per cent Y-o-Y to Rs 3,621.9 crore, leading to further fall in PAT. Asset quality in terms of GNPA could improve by 10 bps while credit cost is expected to increase by 1bp," it said.

 

Kotak Institutional Equities

The brokerage expects SBI’s Q2 operating profit to grow around 9 per cent Y-o-Y with NIM normalisation and lower treasury income in the quarter.

 

It is also predicting 3.7 per cent Y-o-Y NII growth, at Rs 40,943.3 crore, on the back of 14 per cent Y-o-Y loan growth. The brokerage sees NIM declining around 19 bps Y-o-Y/5 bps Q-o-Q to 3 per cent, mostly led by slippages (PSL loans) and higher cost of funds.

 

Net profit is seen tumbling 10 per cent Y-o-Y and 24.3 per cent Q-o-Q to Rs 12,893.6 crore on the back of higher provisions, which are seen soaring 3,341 per cent Y-o-Y to Rs 3,966.8 crore.

 

"We expect slippages at around 1.5 per cent of loans (lower than Q1 FY25, as there is no seasonal stress from PSL [agriculture]). We are likely to see lower recovery and upgrades as well. Key discussion would be on NIM, return on equity (RoE), unsecured loans, and CAR for the quarter," the brokerage said.

 

Axis Securities

Axis Securities expects NII growth (5 per cent Y-o-Y/0.7 per cent Q-o-Q) to be soft in Q2 FY25, with NIMs likely to witness marginal compression Q-o-Q.

 

Opex ratios could inch up marginally, and PPOP growth may be flat sequentially. Credit costs could continue to normalise, and asset quality may remain steady.

 

Key monitorables for

investors could be comments on capital adequacy, and outlook on loan book growth and return ratios.

 

It pegs NII at Rs 41,427 crore, PPOP at Rs 25,618 crore, and net profit at Rs 16,074 crore.