SBI Q2 results today: Here is what experts project for the banking behemoth

As per news reports, SBI will likely report a double-digit growth in both profit and net interest income (NII) due to healthy loan and deposit growth in the second quarter.

However, operating profit margins may witness some compression on account of the rise in provisions.

SBI’s NII in Q2 FY25 is pegged in the range of ₹41,362 crore to ₹53,597 crore. This translates into a wide window of around 5-35% increase from ₹39,500 crore of NII seen in the year-ago period.

Net profit is expected to come in between ₹15,022 crore and ₹18,711 crore for the quarter under review. This, too, indicates a 5-30% growth from the net profit of ₹14,330 crore seen in the corresponding quarter of the previous financial year (Q2 FY24).

SBI Q1 FY25 Results

The banking behemoth reported an almost flat standalone net profit of ₹17,035 crore for the first quarter of the current financial year (Q1 FY25). 

The country's biggest lender had posted a net profit of ₹16,884 crore in the April-June quarter of 2023-24.

As per the Reuters report, the lender beat estimates on the profit front; however, the bank also witnessed its provisions for loan losses rise sharply.

The bank's total income increased to ₹1,22,688 crore in the first quarter against ₹1,08,039 crore a year ago. 

SBI's asset quality saw an improvement. Its gross non-performing asset ratio declined to 2.21% at the end of June from 2.24% at the end of the previous quarter. Its net non-performing assets (NPAs) also eased to 0.57% in the June 2024 quarter from 0.71% a year ago.

SBI's loans grew 15.39%, led by strong demand for retail loans, while deposits grew 8.18%. But loan loss provisions, or funds set aside for potential bad loans, jumped 70% on-year to ₹4,518 crore.

"Growth in SBI's loan book, given its massive size, is seen as an indicator of broader economic trends in the country. Indian banks have reported strong loan growth over the past few quarters, boosted by consumer spending amid firm economic growth," said the Reuters report. 

On a consolidated basis, SBI's net profit rose marginally to ₹19,325 crore against ₹18,537 crore in the same quarter of the previous fiscal.

At the same time, its total income increased to ₹1,52,125 crore compared to ₹1,32,333 crore in the corresponding period of the preceding financial year.

Besides approving the results, the board also cleared proposals for raising funds in rupee or dollar by issuing Basel III compliant Additional Tier 1 Bonds and Tier 2 Bonds of up to ₹25,000 crore to domestic and/or overseas investors during FY25.

Net interest income, the difference between interest earned and paid, grew 5.7%. Net interest margins shrank 12 basis points on-year and on-quarter to 3.35%.

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