CS Setty, the Chairman of the State Bank of India (SBI), has shared that the bank is aiming to achieve an operating profit of Rs 1 trillion this year. This positive outlook is based on strong economic factors, good credit growth across different areas, and successful deposit efforts in the second quarter (Q2). Currently, the bank’s base stands at Rs 39 lakh crore, and a 15% growth rate on its domestic business seems achievable.
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Medium-Term Goal: Becoming the First Bank with Rs 1 Trillion in Net Profit
Setty explained that SBI’s medium-term goal is to become the first Indian company to achieve a net profit of Rs 1 trillion. He believes that the bank is on the right track to achieve this, with current performance indicating good credit growth and control over deposit costs.
Credit Growth in Key Sectors
Setty mentioned that several industries are driving the bank’s credit growth, including petrochemicals, road infrastructure, and renewable energy. The bank has seen significant progress in financing road projects, both new ones and those that are moving into Infrastructure Investment Trusts (InvITs), which are based on future cash flow. Additionally, SBI is seeing good growth in financing renewable energy projects, such as solar, wind, and hybrid energy.
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Credit Growth Expectations
SBI’s target for credit growth is between 14% and 16%. Setty believes that a 15% growth rate is more realistic, especially as the bank’s base continues to grow.
Deposit Growth and Targets
SBI has seen a 9% growth in deposits and is aiming for even higher growth this year. Setty highlighted that the bank has already achieved double-digit growth in retail term deposits, which are now around Rs 25 to 26 lakh crore, with a growth rate of 12%. This strong growth in deposits sets the bank up well to achieve its goals for the year.
Financial Results for Q2
In the second quarter, SBI reported a 28% increase in its net profit, reaching Rs 18,331 crore. This growth was driven by higher revenue from lending and lower operating expenses, which helped balance out the higher provisioning costs. Additionally, the bank’s deposit base surpassed Rs 50 lakh crore in the September quarter.
