SBI Q1FY20E Result Expectation

Margins to improve slightly on higher MCLR and recovery efforts.

SBI agreement expectations for Q1FY20E:

NII – Rs22,476cr, up by 3.1% yoy and decline by two.1% qoq, because of higher credit growth for the most part motor-assisted by retail segments and stable NIMs. PPOP – Rs14,990cr, up by 25.2% yoy and decline by eleven.5% qoq, because of higher NII and alternative financial gain PAT – Rs4,554cr, because of higher PPOP and decline in provisions. 

Remarks: we tend to expect loan growth at ~12% yoy and table game unchanged qoq at ~2.9%, which is able to drive NII. Margins to boost slightly on higher MCLR and recovery efforts. Slippage can primarily come back from the watch list. Lower slippages and robust recovery to boost NPAs. Non-interest financial gain growth are going to be higher because of higher treasury financial gain and financial gain from written-off loans. we tend to expect slippages at one.6% of loans. RoE recovery would be the key monitorable.