Share of State Bank of India (SBI) was trading higher in early trade ahead of the lender's Q2 earnings today. SBI share was trading 0.32% higher at Rs 205.40 against previous close of Rs 204.75 on BSE. The share trades higher than 5 day, 20 day, 50 day and 100 day moving averages but lower than 200 day moving averages.
The large cap share has lost 34.55% in one year and fallen 38.37% since the beginning of this year.
Total 6.33 lakh shares changed hands amounting to turnover of Rs 13.21 crore on BSE. Market cap of the lender rose to Rs 1.83 lakh crore.
Kotak Institutional Equities sees SBI reporting a growth of 26.9 per cent in Q2 net profit on year on year basis. Net interest income is seen rising 8.2 per cent.
"We expect slower growth in NII (8 per cent yoy) given the recent cuts in lending yields and deposit rates," the brokerage said.
SBI is expected to report a subdued loan growth at around 7 per cent YoY and core net interest margins (NIMs) may remain unchanged QoQ at around 3.2 per cent.
It sees a decline in operating profit mainly on account of stake sale gains (life insurance) in the base quarter. "We expect slippages at 1.6 per cent of loans (subject to court ruling) as the moratorium has now been lifted but the restructuring option would keep this quarter's slippages on the lower side. We wait to see if the bank would further increase its coverage ratio," the brokerage said.
ICICI Securities expects the state-run lender to report a growth of 55 per cent in net profit, aided by lower tax outgo. "Outstanding contingency provisions at Rs 3,000 crore (excess provisions on HFC exposure + Covid related) and buffer in booking MTM gains on treasury portfolio, will cushion earnings of some stress recognition," the brokerage said.
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HDFC Securities said, "SBI is expected to post loan growth of 8% YoY (+1% QoQ), which will drive NII growth of 9.6/1.2%. Non-interest income to fall sequentially, led by lower core fees and treasury gains. Further, non-interest income in 1Q included stake sale gains of Rs in SBI Life. PPOP is expected to de-grow 14.7/14.1% led by lower non-interest income; core PPOP to grow 5% YoY. PAT is envisaged to grow by 8% YoY (down 22% QoQ)."
In Q1 of current fiscal, SBI reported a 81 per cent rise in standalone net profit at Rs 4,189.3 against Rs 2,312.20 crore in the corresponding period last year. The public sector lender reported a one-time gain of Rs 1,539.7 crore in the quarter under review. In June, SBI sold 2.1 percent stake in SBI Life through offer for sale route. Net interest income (NII) stood at Rs 26,641.6 crore in Q1FY21 compared to Rs 22,938.8 crore in the year-ago period.