- 05 May 2025
- ICICIdirect Research
SBI REPORTED A MIXED PERFORMANCE IN Q4FY25
News: SBI reported a mixed performance in Q4FY25, with other income aiding earnings and higher write-offs supporting GNPA improvement. Moderation was seen in business growth across both advances and deposits. Credit growth remained broadly in line with the industry at 12.4% YoY, driven by MSME, agri, and retail segments, while corporate growth was slightly slower. Deposit accretion was modest at 9.5% YoY, led primarily by term deposits (11.5% YoY). Asset quality stayed robust with slippages down 4 bps QoQ at 55 bps, GNPA down 25 bps QoQ to 1.82% (aided by higher write-offs), and NNPA down 6 bps to 0.47%. Despite front-loading provisions (~₹6,000 crore) in Q4FY25, credit cost remained contained at 38 bps, and PCR stayed broadly steady at ~74.4%. Operational efficiency remained strong; however, margins saw a 3 bps QoQ erosion to 3.09%, driven by rate cuts and higher deposit costs. The 10% YoY decline in PAT is optical, largely due to elevated provisions in Q4FY25.
View: Guidance for credit growth aligning with the industry and RoA to remain stable at 1-1.1% amid quarterly volatility bodes well. Treasury gains, amid anticipated rate cuts, remain catalyst for earnings.
Impact: Neutral