State Bank of India (SBI) who is set to declare its results for the third quarter of FY21, on Thursday, is expected to post a net profit of ₹4,850.5 crore in the three months to December 2020 which is 13% lower than ₹5,583.36 crore in the same period last year.
“While collection trends have improved to around 97%, restructuring of only up to 1% of loans is expected. Furthermore, legacy issues in the corporate non-performing asset (NPA) cycle are now largely behind, and the bank carries a healthy provision coverage ratio (PCR) of about 88% on corporate NPAs,” a report said on 7 January.
Backed by robust growth in retail loans and lower provisions for bad loans, in the September quarter of FY21, SBI reported a 52% year-on-year jump in net profit to ₹4,574 crore. The bank had also guided for additional COVID-19 recasts of ₹13,000 crore till the closure of the window on December 31.
As the uncertainty brought about by the pandemic has receded significantly, analysts at Motilal Oswal believe that SBI appears well-positioned to report a strong uptick in earnings.
Shares of SBI on the BSE closed at ₹335.85 on Wednesday, up 0.8% from its previous close.
Meanwhile, ICICI Direct Research expects loan growth of 5.2% on a year-on-year (y-o-y) basis to ₹23.16 trillion and 10% y-o-y for deposits. It said in a note on 8 January that non-interest income or other income is seen at ₹7,700 crore in the December quarter.