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ICICI Securities Report
State Bank of India's Q3 FY23 earnings surpassed expectations, with beat across operating metrics crossing 1% return on asset and nine months-FY23 return on equity crossing 18% RoE mark. Profit after tax of Rs 142 billion, ahead of our estimate of Rs 137 billion was supported by:
net interest margin soaring 18 basis points QoQ led by repricing benefit and contained deposit cost,
net advances growth of 19% YoY/ 4% QoQ,
slippages at 41 bps, credit cost of mere 21 bps, net non-performing assets now at 0.77% with 76% coverage,
treasury gains of Rs 29.4 billion against a loss of Rs 60.9 billion in H1 FY23 provided further incremental delta.
We expect NIM trajectory to sustain with repricing of lending book offsetting any deposit cost rise. Credit growth of 18% / 16%, stable NIMs, operating profit growth of 15% / 19% and credit cost of 0.6% / 0.8% will drive RoE to 19%/ 17% by FY23E/FY24E, respectively. This will help SBI command 1.7 times FY24E core banking business book.
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More Research Reports On SBI's Q3 FY23 Results Review
Steady Asset Quality Metrics; Growth Outlook Remains Upbeat: Dolat Capital
Another Strong Performance With Highest Quarterly Profit: ICICI Direct
Robust Performance Boosted By Treasury Gains: Motilal Oswal
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