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State Bank of India — Q2 FY24
SBI reported Q2 FY24 PAT of INR 14,330 crore (+8% YoY), with domestic NIM at 3.43% (down 12bps YoY) due to higher deposit costs.
bullish
high
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SBI reported Q2 FY24 PAT of INR 14,330 crore (+8% YoY), with domestic NIM at 3.43% (down 12bps YoY) due to higher deposit costs. Operating profit fell 8% YoY to INR 19,407 crore, impacted by a INR 3,417 crore additional wage provision. Asset quality improved: GNPA at 2.55% (lowest in 10+ years), credit cost at 0.22%. Domestic advances grew 13.2% YoY, led by SME (+22.75%) and retail (+15.68%). Management expects NIM compression of 3-5bps more, then stabilization. Loan growth guidance of 12-14% is supported by a strong pipeline (INR 4.8 trillion). Key risk: potential RBI risk weight increase on small-ticket unsecured loans, though SBI's exposure is minimal.
SBI ने दूसरी तिमाही में 14,330 करोड़ रुपये का शुद्ध लाभ कमाया, जो पिछले साल से 8% ज्यादा है। ब्याज से होने वाली कमाई का अनुपात 3.43% रहा, जो पिछले साल से थोड़ा कम है, क्योंकि जमा पर ब्याज देने की लागत बढ़ी है। परिचालन लाभ 8% घटकर 19,407 करोड़ रुपये रहा, जिसकी वजह कर्मचारियों के वेतन के लिए 3,417 करोड़ रुपये का अतिरिक्त प्रावधान है। कर्ज की गुणवत्ता बेहतर हुई है - फंसे कर्ज का अनुपात 2.55% है, जो 10 साल में सबसे कम है। छोटे और मझोले उद्योगों को दिए कर्ज में 22.75% और खुदरा कर्ज में 15.68% की बढ़ोतरी हुई। बैंक को उम्मीद है कि ब्याज कमाई में थोड़ी और गिरावट आएगी, फिर स्थिर होगी। कर्ज देने का लक्ष्य 12-14% रखा गया है।
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Domestic NIM
3.43%
-12bps YoY
Net interest margin for Q2 FY24 declined due to higher cost of deposits.
Gross NPA Ratio
2.55%
-97bps YoY
Lowest gross NPA in over 10 years, reflecting improved asset quality.
SME Advances Growth
22.75%
+22.75pp YoY
Robust growth driven by working capital and supply chain finance.
Credit Cost
0.22%
-6bps YoY
Improved credit cost reflects lower slippages and strong provisioning.
What Changed vs Last Quarter
NEW
Domestic NIM to compress 3-5bps more then stabilize
Management expects domestic NIM to decline by another 3-5 basis points from current 3.43% and then stabilize around that level by year-end.
NEW
Loan growth guidance of 12-14% for FY24
Management expects overall loan growth in the range of 12-14%, with potential to surprise on the higher side.
NEW
SME book target of INR 4 trillion by FY24
SME advances are expected to reach INR 4 trillion by FY24, driven by analytics-led products and improved infrastructure.
NEW
CET1 ratio expected above 11% by year-end
With profit plough-back, CET1 ratio is expected to improve to over 11% by March 2024, from current 9.94%.
DROPPED
Credit growth of 14-15% in FY24
Management expects domestic advances to grow 14-15% in FY24, supported by robust pipeline and broad-based demand.
DROPPED
NIM to sustain around 3.47%
Chairman stated effort to retain domestic NIM at 3.47% for the full year, despite sequential volatility.
DROPPED
Cost-to-income ratio improvement via digital and productivity
Management aims to reduce cost-to-income ratio by shoring up income and improving staff productivity through digital sourcing and SBOSS.
DROPPED
Add ~300 branches in current year
Bank plans to add about 300 branches in FY24, focusing on potential areas, alongside digital expansion.
NEW RISK
Potential RBI risk weight increase on unsecured loans
RBI may increase risk weights on small-ticket unsecured loans (below INR 50,000), which could impact capital requirements, though SBI's exposure is minimal.
NEW RISK
Geopolitical risks impacting overseas book
Global uncertainties and Middle East conflict could affect the international loan book, though management is focusing on stable geographies.
RISK GONE
Global economic headwinds impacting international book
Management is cautious on international growth due to global challenges, which could limit earnings diversification.
RISK GONE
Competition from HDFC Bank merger
Analyst raised concern about competitive pressure post-merger; management downplayed citing scale and low attrition.
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Guidance and risk preview
Management expects domestic NIM to decline by another 3-5 basis points from current 3.43% and then stabilize around that level by year-end.
RBI may increase risk weights on small-ticket unsecured loans (below INR 50,000), which could impact capital requirements, though SBI's exposure is...
View Risks →