State bank of India conducted a conference call on 09 May 2023 to discuss its financial results for the quarter ended March 2023. Dinesh Kumar Khara, Chairman of the bank addressed the call:

Highlights:

The bank has delivered the highest ever net profit for FY2024. The bank has delivered strong profit despite creating provisions of Rs 13387 crore for wage revision and Rs 7100 crore for pension and DA neutralization during the year.

The bank has exhibited 8 bps improvement in the RoA to 1.04%, while RoE improved by 89 bps to 20.32% in FY2024.

The bank has continued to report an ROE of above 15% for the last 7 quarters and aims to continue to deliver an ROE of above 15% on a sustainable basis, going forward.

The customer base of the bank has touched 50 crore which is 35% of India''s population.

The deposits of the bank have increased by 11% and term deposits by 16%. The bank aims to contain the share of wholesale deposits, while it has enough liquidity.

The excess SLR of the bank stands at Rs 3.7 lakh crore, while the liquidity coverage ratio was at 124% end March 2023.

The credit growth has been robust across segments. The retail agriculture and MSME loan book size has touched Rs 20 lakh crore of which retail stands at Rs 13.5 lakh crore, agriculture 3.0 lakh crore and MSME at 4.4 lakh crore end March 2024.

The corporate loan book also surged 16% end March 2024.

The bank is taking a lot of initiative on the digital side and about 61% of the saving accounts are opened digitally.

The GNPA Ratio of the bank is at its lowest level in more than 10 years. The NNPA ratio declined to 0.57% end March 2024.

The credit cost of the bank has declined by 3 bps to 29% in FY2024.

The bank has well provided on the stressed book with provision coverage ratio at 91.89% end March 2024.

The attrition rate for the bank is only 1.43%.

The bank AIIMS to reduce cost to Income ratio by focusing on improving the income

With regard to guidelines on provisioning for the project loan, the bank does not expect any big impact. The bank is sitting on the non NPA provisions of Rs 32000 crore.

The miscellaneous income of the bank was boosted by recoveries income and dividend income from the subsidiaries.

The bank has transferred 24 accounts with the exposure of Rs 7451 crore to NARCL in FY2024.

The bank is targeting loan growth of 13-15% for FY 2025.

The bank is expecting additional employee expenses of Rs 500 Crore per month and Rs 6000 crore annual for FY2025.

The bank aims to maintain the margins at current level in FY2025.

As the ROE of the bank is above 20% against the loan growth of 15%, it has enough headroom to plough back the capital. With the current capital position, the bank can grow its balance sheet by Rs 7 lakh crore translating to 21% growth.

As per the bank, the growth capital will never be a constraint for the bank as well as group companies.

The bank is focused on maintaining the best asset quality and keeping the credit cost as low as possible.

The bank has reduced the agriculture sector in NPAs from 15% to 9% and it aims to further reduce it to 6 to 8%.

The bank wants SBI General Insurance to grow further before it goes for IPO.

The bank has recorded recoveries of Rs 6900 crore in FY 2024. There are no lumpy accounts left for recovery and recoveries ahead would be mainly contributed by granular accounts.

About 13% of the loan book is underwritten through digital channels and the bank expects it to grow further going forward.

About 36% of the loan book of the bank is linked to MCLR, 27% to TBLR, 21%to fixed rate and others is 14%.