{"id":107,"date":"2019-08-06T11:58:52","date_gmt":"2019-08-06T11:58:52","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=107"},"modified":"2019-10-04T04:23:42","modified_gmt":"2019-10-04T04:23:42","slug":"sbi-1qfy20-result-update-profitability-sequentially-better-pace-of-improvement-disappoints","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2019\/08\/06\/sbi-1qfy20-result-update-profitability-sequentially-better-pace-of-improvement-disappoints\/","title":{"rendered":"SBI 1QFY20 result update: Profitability sequentially better, pace of improvement disappoints."},"content":{"rendered":"\n<p><em>Dated: 5th August 2019<\/em><\/p>\n\n\n\n<ul><li>Advances grew by 14% YoY to Rs 21,347 bn. Indian\nretail book growth was 17% while corporate book growth was 12%. Foreign\nadvances book grew by 16%.<\/li><li>NII was Rs 229 bn, 5% higher YoY. Overall NIMs\nat the Bank level marginally improved to 2.81% from 2.78% in 4QFY19.<\/li><li>Total operating expense was 7% higher YoY. The\nincrease was due to higher employee provisions on account of decline in bond\nyields.<\/li><li>Provisions were 52% lower YoY and 44% lower QoQ.\nThe total provisions number was lower due to provision write backs of Rs 24 bn.\nNPA provisions were Rs 116 bn in 1QFY20 vs. Rs 130 bn in 1QFY19 and 173 bn in\n4QFY19.<\/li><li>Reported PAT was at Rs 23 bn vs Rs 48 bn loss\nreported in 1QFY19 and Rs 8 bn profit in 4QFY19.<\/li><li>Asset Quality was stable on a sequential basis\nwith GNPA and NNPA at 7.53% and 3.07% respectively.<\/li><\/ul>\n\n\n\n<p>Management commentary:<\/p>\n\n\n\n<ul><li>Slippages were high in 1QFY20 at Rs 162 bn\ncompared to Rs 99 bn and Rs 75 bn in 1QFY19 and 4QFY19 respectively. Reasons\nfor this jump include Rs 20 bn exceptional agri slippages in one state on\naccount of farm loan waiver, higher SME slippages due to absence of RBI\ndispensation which was available in 1QFY19, Rs 20 bn due to some technical\nissues in an account that is being serviced regularly. <\/li><li>Out of Rs 116 bn NPA provisions made in 1QFY20,\nRs 23 bn was provided against 2 accounts that are standard but need proactive\nprovisions as per a recent RBI circular.<\/li><li>Management has guided to credit costs of 140 bps\nfor FY20E. This includes any additional provisions that may be required for the\n2 specific currently standard accounts (DHFL and one renewable energy account).\nThis credit cost guidance is higher than the previous guidance of 100 bps.<\/li><li>Management is expecting loan growth of 12% and\nNIMs for the overall business of 3.15% in FY20E.<\/li><li>In the current scenario, management expects to\nachieve core RoA of 0.5-0.6% in FY20. Gains from recoveries or subsidiary stake\nsale will be over and above this return guidance. This is lower than previous\ncomparable guidance of 0.70-0.75%<\/li><\/ul>\n\n\n\n<p>Consensus estimates (Source: Marketscreener website):<\/p>\n\n\n\n<ul><li>The stock price was Rs 300\/- as of 5-Aug-19 and\ntraded at 1.17x\/ 1.04x the consensus Book Value for FY20E\/21E BV of Rs 256\/286\nrespectively.<\/li><li>Consensus target price is Rs 376\/- implying P\/B\nof 1.31x for FY21E BV of Rs 286<\/li><\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Dated: 5th August 2019 Advances grew by 14% YoY to Rs 21,347 bn. Indian retail book growth was 17% while corporate book growth was 12%. Foreign advances book grew by 16%. NII was Rs 229 bn, 5% higher YoY. Overall NIMs at the Bank level marginally improved to 2.81% from 2.78% in 4QFY19. Total operating [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4,53],"tags":[8,13,69,6,68,70,19],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/107"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=107"}],"version-history":[{"count":1,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/107\/revisions"}],"predecessor-version":[{"id":108,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/107\/revisions\/108"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=107"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}