SBI Q1 Results Review - Healthy Loan Growth Despite Seasonally Weak Quarter: Nirmal Bang

Nirmal Bang Report

State Bank of India’s Q1 FY25 net interest income/pre-provision operating profit/profit after tax came in at a variation of (-)3.3%/(-)0.7%/(-)0.5% versus our estimates. PPOP/PAT were better by 3.3%/2.7% versus consensus estimates. PAT of Rs 170.4 billion (up 0.9% YoY/down 17.7% QoQ) was impacted by lower other income (down 7.5% YoY/35.7% QoQ), which was down due to a sharp QoQ decline in fee income and treasury income.

However, the decline in cost-to-income ratio to 49.4% (due to moderation in opex growth) was a key positive. Loan growth continued to remain healthy at 15.9% YoY, but the bank scaled down deposit growth to 8.2% YoY to protect its cost of funds and margins.

NIM moderated by 11 bps YoY and 6 bps QoQ to 3.22%. While asset quality remained pristine with gross /net non-performing asset of 2.21%/0.57%, the slippage ratio increased from 0.43% to 0.84% sequentially due to seasonal slippages from the agriculture sector and some spike in Xpress credit (due to delay in salary credit in some states).

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