SBI Chairman Media Conference: State Bank of India (SBI), the largest bank in the country, announced remarkable financial growth with a 178 percent increase in net profit, reaching 16,884 crore for the April-June FY24 quarter compared to 6,068 crore last year. In a media conference after releasing the results, Chairman Dinesh Khara provided insights into SBI’s strategies and expectations for the fiscal year ahead.
Credit and Deposit Growth:
Khara highlighted SBI’s aim for a robust credit growth of 15 percent and a deposit growth of 13 percent in FY24. He mentioned that the bank has lined up a credit pipeline of Rs 3.5 lakh crore for lending to corporates in the current financial year.
CASA Ratio and Trends:
Discussing the current account and savings account (CASA) ratio, Khara noted that a decline in CASA is a trend seen across the banking industry. While SBI also experienced a drop, it was comparatively less significant than other banks. The chairman emphasized efforts to improve CASA, especially with the current account component, as evolving economic dynamics influence customers’ banking habits.
Recoveries and Asset Quality:
Khara revealed that in the April-June FY24 quarter, SBI recorded recoveries of about Rs 1,200 crore, slightly lower than the previous year’s figure due to the reduced size of the remaining stock of problematic loans. He emphasized the effectiveness of SBI’s underwriting and control mechanisms on the retail side, leading to improved asset quality. He mentioned that most slippages did not originate from running accounts, and the bank successfully recovered a significant portion of SME and agri slippages.
Credit and Deposit Growth Plans:
Khara projected a credit growth of 14 to 15 percent, primarily focusing on retail, SME, and agri sectors. He acknowledged that international expansion would be selective, while domestic growth remains a priority. Corporate lending opportunities will be pursued cautiously, focusing on sectors like renewables, services, and infrastructure. Deposit growth, currently at 12 percent, is targeted to reach around 13-14 percent, driven by strategic efforts.
Net Interest Margin (NIM) and Financial Dynamics:
Khara addressed the contraction in net interest margin (NIM) due to certain one-off factors from the previous year. He assured that the core business model remains strong, with a year-on-year NIM of 3.47 percent. He emphasized the importance of maintaining a reasonable NIM to ensure fair pricing for borrowers and depositors.
Digital Growth and YONO:
Khara noted that SBI has around 6.5 crore digital banking users across various platforms, including YONO (You Only Need One), the bank’s integrated digital offering. He emphasized SBI’s commitment to digital upgradation, including investments in analytics and customer acquisition through digital means. SBI’s digital underwriting increased from Rs 20,000 crore in the previous year’s first quarter to Rs 29,000 crore this year.
Slippages and Recovery Trends:
Khara acknowledged a slightly elevated trend in slippages, with Rs 7,600 crore reported in the April-June FY24 quarter compared to Rs 9,700 crore in the same period the previous year. He indicated that recoveries made in July would reflect in the September quarter, positively impacting subsequent quarters.
The media conference provided a comprehensive overview of SBI’s performance, strategies, and outlook for the upcoming fiscal year.