SBI Q3 results: PSU bank likely to report 60-90% surge in profit; here's why

State Bank of India (SBI), the largest PSU bank in India, is likely to report a 60-90 per cent surge in net profit for the December quarter on a single digit rise in year-on-year (YoY) net interest income (NII). Profit may rise on a low base. Net interest margin (NIM) is expected to come in marginally lower. Banking analysts see slightly elevated provisions for SBI and slightly higher cost ratios in Q3. Asset quality is expected to remain contained. All eyes would be on the management commentary on capital adequacy, loan book growth and return ratios.

Mirae Asset Sharekhan expects SBI to report 60.90 per cent YoY surge in net profit at Rs 14,748 crore for the December quarter compared with Rs 9,164 crore in the same quarter last year. NII is seen rising 6.2 per cent YoY to Rs 42,290 crore compared with Rs 39,816 crore YoY. Pre-provision operating profit is seen rising 24.5 per cent YoY to Rs 2,531 crore.

Mirae Asset Sharekhan said advances may grow at 13 per cent, NIM may fall marginally on a sequential basis and asset quality may remain broadly stable. It sees lower treasury gains this time.

Axis Securities expects Q3 profit for SBI to rise 79.7 per cent YoY to Rs 16,473 crore on 6.1 per cent YoY rise in NII at Rs 42,260 crore. It said advances and deposits growth may remain healthy, above industry average. The brokerage is factor in lower treasury income sequentially. It said Opex growth could be modest and credit costs may continue to normalise.

Nuvama sees SBI profit at Rs 17,090 crore, up 86.5 per cent YoY. NII is seen at Rs 42,120 crore. Provision is seen at Rs 4,500 crore. OPEX is seen falling 28 per cent YoY to Rs 27,360 crore.

Nomura India expects SBI to stand out relatively among banks, as it sees 14 per cent YoY loan growth in the December quarter against 11 per cent YoY for large banks under its coverage. Adjusted for extra-ordinary items, it sees Q3 PAT for SBI at Rs 17,010 crore, up 5 per cent.