So far this year, SBI shares have surged over 27 percent, outperforming Nifty 50 which rose a paltry 2 percent.
The best estimate was forecasted by Motilal Oswal analysts as they pegged NII to rise up to Rs 41,460 crore, while Prabhudas Lilladher set the lowest estimate at Rs 40,069 crore.
Emkay Global analysts set the best estimate for profit at Rs 18,200 crore in Q4FY24, whereas Prabudhas Lilladher pegged lowest profit at Rs 10,432 crore.
Analysts attribute the anticipated decline in SBI's profit in Q4 to one-time employee wage revisions.
Its net NPA, too, is likely to improve to 0.6 percent in Q4FY24 from 0.7 percent in the year-ago period.
So far this year, the stock of SBI surged over 27 percent, outperforming 2 percent rise in the benchmark Nifty 50 index
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India's largest lender - State Bank of India (SBI) is all set to report a sharp fall in its net profit for the January-March quarter (Q4FY24) owing to one-time wage revisions and higher operating expenditure, while lower loan growth is expected to restrict rise in net interest income (NII), said analysts.
The public sector lender is scheduled to report Q4 results on May 9, 2024. So far this year, SBI shares have surged over 27 percent, outperforming Nifty 50 which rose a paltry 2 percent.
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According to an average estimate of 10 brokerages, SBI's NII is likely to grow marginally by 0.7 percent YoY to Rs 40,693 crore in Q4FY24 from Rs 40,393 crore a year back. The best estimate was forecasted by Motilal Oswal analysts as they pegged NII to rise up to Rs 41,460 crore, while Prabhudas Lilladher set the lowest estimate at Rs 40,069 crore.
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On the other hand, the lender's net profit is expected to see a sharp fall of up to 20 percent YoY to Rs 13,400 in Q4FY24 from Rs 16,695 crore in the year-ago period. Emkay Global analysts set the best estimate for profit at Rs 18,200 crore in Q4FY24, whereas Prabudhas Lilladher pegged lowest profit at Rs 10,432 crore.
Analysts attribute the anticipated decline in SBI's profit in Q4 to one-time employee wage revisions. SBI allocated an additional provision of Rs 11,000 crore in H2FY24 to accommodate a 17 percent wage hike following an agreement between bank unions and the Indian Bank Association (IBA).
With a workforce of 2.3 lakh employees as of March 2023, SBI's incremental provisions will cover increased employee and pensioner wages, along with higher dearness allowances.
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At a time when most of the banks are grappling challenges of higher cost of funds, SBI won't be an exception. SBI's net interest margins (NIMs) are expected to contract by 43 basis points (bps) YoY to 3.2 percent in Q4FY24 from 3.6 percent in Q4FY23, said Nomura analysts.
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Asset-quality picture is expected to remain steady for SBI. Analysts at Motilal Oswal forecast gross non-performing assets (NPA) to improve to 2.3 percent in Q4FY24 from 2.8 percent in Q3FY24. Its net NPA, too, is likely to improve to 0.6 percent in Q4FY24 from 0.7 percent in the year-ago period.
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