SBI-A Bank Of NPAs

[epicresearch]

Slippages: Large upgrades helped NPL trends during F4Q12.
In F2013, it expects slippage run-rate of Rs40-45bn per quarter. This implies a net new NPL creation of ~Rs60bn for the year (after building in Rs30bn of upgrade/recovery, etc., a quarter).
•NIMs: Likely to decline to 3.6-3.7% from 3.85% in F2012.
Loans likely to grow at 15% in F2013.
Employee expenses: Employee wage hike negotiations will begin in F3Q12; likely pension provisions will be Rs3-4bn per quarter starting F3Q13.

Capital: Expect another 20bp of Tier I capital benefit this year through various capital conservation measures. A growth rate of 15% in F2013 can be self financed.