|Particulars (In Cr.)||Q3FY21||Q2FY21||Q3FY20||QoQ %||YoY%|
|Net Interest Income||28,820||28,181||27,779||2.3%||3.7%|
|Net Profit after tax||5196||4574||5583||13.6%||-6.9%|
|Gross NPA||4.77||5.28||6.94||(51) bps||(217) bps|
|Net NPA||1.23||1.59||2.65||(36) bps||(142) bps|
|Provision Coverage Ratio||90.21||88.19||81.73||202 bps||848 bps|
|Net Interest Margin||3.34||3.34||3.59||(25) bps||–|
|Capital Adequacy Ratio||14.50||14.72||13.73||(22) bps||77 bps|
|CASA Ratio||45.15||45.39||44.72||(24) bps||43 bps|
- Net Interest Income in Q3FY21 grew by 3.7% YoY to Rs. 28820 crores; NIM was 3.34%
- Interest Income of Q3FY20 includes one-time recovery of Rs. 4039 Crores.
- Excluding one-time interest income of Rs 4,039 crs and other income of Rs.452 crs in Q3FY20, NII grew at 21.40% YoY in Q3FY21 while Operating Profit grew by 26.23% YoY.
- GNPA and NNPA declined to 4.77% and 1.23%, from 5.28% and 1.59%, respectively on QoQ basis
- Proforma Gross NPA at 5.44% vs 5.88% in Q2FY21, Proforma Net NPA at 1.81% vs 2.08% in Q2FY21
- Provision coverage ratio improved to 90.21% from 81.73% at December’20
- Total Deposits grew at 13.64% YoY, out of which Current Account Deposit grew by 11.33% YoY, while Saving Bank Deposits grew by 15.99% YoY
- Sharp Decline in fresh slippages at Rs 237 crore compared with Rs 16525 crore a year earlier.
- Slippage ratio as on 31st Dec 2020 is at 1.27% vs 1.73% in Q2FY21 (including proforma slippages).
- Credit growth for full year FY21E to be 7%
- Of the total retail loans 41% come from digital
- Credit cost may be much lower than 2%
- Total restructuring requests of Rs 18100 Crore includes Rs 3800 from Retail loan (60% from home loans), there can be some addition as MSME window is open till March, however increase may not be substantial. Corporate restructuring includes one large account.
- Retain guidance of Rs.60000 Cr. Slippages and restructuring for FY21
- Do not expect to make additional Provisions on accounts to be transferred to proposed ARC.
- Employee cost is expected to increase by 10bn on qtrly basis, there will be no need to any wage revision provision and Retiral benefit provision will depend on the yield.
SBI beats street estimates on all front. Collection efficiency of the bank in Q3FY21 in the Domestic loan book stands at 96.5%. The bank holds unutilized COVID provisions of Rs. 6200. Proforma PCR improved 200bp QoQ to 68%, with Corporate portfolio PCR improving to 89%. SBI is expected to come out of the COVID impact without much stress in its asset quality. The big positive for the bank is the delcine in fresh slippages in Q3FY21 declined to Rs. 237 Cr. compared with Rs 16525 crore a year earlier. Proforma NPAs of the bank also improved in Q3FY21. Strong asset quality performance and commentary on likely slippage and probable restructuring is a big positive surprise. Given the bank’s focus to clean up and strong asset quality we expect the bank to do well in coming quarters too. Thus Investors can accumulate the stock between Rs.360 -Rs.380 for the target price of Rs.470 with 12 months’ time frame.
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