PSB Q2 preview: NPA recognition ruling to prevent higher slippages

Analysts pegs SBI's PAT at Rs 3,435.5 crore for the quarter under review, at Rs 517 crore for Bank of Baroda, and at Rs 189 crore for PNB

Earnings expectations for the recently concluded quarter (Q2FY21) continue to be uncertain for public sector banks (PSBs). While analysts agree that the credit growth could be sluggish, coupled with delayed bad loan resolutions, the quantum varies across the board.

Analysts at Motilal Oswal Financial Services, for instance, expect most PSBs to see muted profit growth for banks under their coverage impacted by sluggish loan growth, higher proportion of MSME/SME loans, and delay in resolution of stressed accounts. Consequently, the brokerage sees the net profit declining 16 per cent year-on-year (YoY) for the sector. State Bank of India (SBI), however, remains