All eyes on SBI, ahead of Q3 earnings; stock gains 2%

India’s largest commercial bank State Bank of India (SBI) will be reporting its quarterly earnings on Friday, February 10, 2017. The bank is expected to post a good set of numbers owing to low base in the previous fiscal and supported by huge deposits received post demonetisation.

The results of state-owned SBI is an important gauge to judge the performance of the banking sector in the country along with the overall health of the country’s economy. The company's profit is likely to increase by treasury gains and gains on stake sale in the insurance arm of the bank.

The company is expected to immensely benefit from the huge amount of deposits received on the back of demonetisation move by the government. The current and savings account (CASA) ratio will be boosted in a big way and management commentary on deposits staying with the bank, post the lifting of the cash withdrawal will be important.

Net interest income (NII) for the quarter is expected to increase by close to 6 per cent, however, loan growth may come down significantly in Q3.

Asset quality will be an important key to be watched, whereas commentary from the management will be keenly tracked.

Ahead of the earnings, SBI was trading at Rs 279.80, up 1.5 per cent on NSE.