SBI Q2 net profit seen up 3.5% to Rs 2589 cr

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SBI Q2 net profit seen up 3.5% to Rs 2589 cr

State Bank of India (SBI), country's largest lender, is likely to report a profit after tax of Rs 2,589 crore in the second quarter of FY12, a growth of 3.5% as compared to Rs 2,501.4 crore in the corresponding quarter of last fiscal.

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State Bank of India (SBI), country's largest lender, is likely to report a profit after tax of Rs 2,589 crore in the second quarter of FY12, a growth of 3.5% as compared to Rs 2,501.4 crore in the corresponding quarter of last fiscal.

Net interest income is seen going up 23% to Rs 9,958 crore from Rs 8,115 crore during the same period.

Expectations

•          Slippages are expected to be high but may moderate from past 2 quarters.
o         Slippages from SME and mid-corporate segments to remain high

•          Provisions expected to be high as it needs to catch up on PCR
o         Provision of Rs 550 crore towards counter cyclical buffer

•          Expect improvements in upgrades & recoveries

•          Loan growth to be below industry average at 17% levels

•          Deposit growth of around 15%

•          Margins likely to remain stable due to
o         Strong CASA
o         75 bps base rate hike in Q2

•          Fee income to remain weak

•          Watch out for: asset quality, restructuring trends, growth & margin outlook

Guidance given post Q1FY12

•          Expect NIMs of above 3.5% for FY12

•          Expect FY12 deposit growth at 20-21%

•          Expect FY12 credit growth at 16-18%

•          Expect net profit of Rs 2,500 crore in Q2

•          Expect provisioning of Rs 2,500 crore in Q2