Research

SBI Q4 2011 result analysis - Weak operational Performance, PAT down due to higher provisioning & higher tax rate - Microsec

Posted On : 2011-05-17 19:35:55( TIMEZONE : IST )

State Bank of India's fourth quarter *net profit* tumbled 98.8% YoY to Rs.208.8 Mn on higher provisioning against non-performing assets and gratuity. This is much below the street expectations. According to market estimates, PAT was estimated at Rs.29630 Mn versus Rs.18660 Mn in Q4'10. The *Q4'11 NII* was estimated at Rs.91760 Mn. We believe the lackluster top line performance is mainly due to contraction in NIMs by 29 bps sequentially. Advances grew by 20.3% YoY and deposits grew by almost 16% YoY.

CASA stood at 48.66% as on March'11. CASA grew by 22% YoY.

*Cost efficiency* declined sequentially by 750 bps, however improved by 90 bps YoY. Staff cost to total Opex as % grew by 260 bps YoY.

The bank made *a provision* of Rs.41570 Mn versus Rs. 23494 Mn in Q4'10 on a standalone basis. Out of total provision, the bank set aside Rs.32640 Mn for NPAs as against Rs. 21870 Mn. *Gratuity provision* rose to Rs. 15650 Mn as against Rs. 460 Mn in FY10. On a sequential basis also, the Provision grew by almost 102.63%. The bank had provided for Rs. 23330 Mn for *counter cyclical buffer*. The bank need to provide for another *Rs. 11000 Mn* for CCB in coming quarters. Rs. 5000 Mn was provided for *teaser home loan*portfolio of around Rs. 250000 Mn at straight 2% provisioning required by RBI on such assets.

Its *gross NPA* at 3.28% versus 3.05% YoY. Its *net NPA* was at 1.63% versus 1.72% YoY.

Tax rate was much higher at 98.9% in Q4'11 V/S 40% in Q3'11 & 34.4% in Q4'10.

*Without these onetime effects, the standalone PAT would be around Rs. 23420.7 Mn which would be again below market expectation.*

*On consolidated basis,* the group's net profit after minority interest for Q4'11 had declined by 52.47% at Rs. 12452 Mn. Its total income had increased by 9.8% YoY at Rs. 215047 Mn for Q4'11.

State Bank of India's board of directors at its meeting held on May 17, 2011, has recommended a *dividend of 300% (Rs 30 per share)* for the year ended March 31, 2011. Further, the bank has fixed June 13, 2011 as the date of payment of the dividend of Rs 30 per share.