State Bank of India (SBI), the largest lender in the country, has made significant cuts to its workforce, reducing its total headcount by 10% since FY19. This amounts to 25,000 fewer staff members. As of March 31, 2024, SBI had 232,296 employees, compared to 257,252 at the end of FY19. Despite having one of the lowest attrition rates in the sector (1.43% during FY24), the bank has seen an average reduction of 5,000 employees per year since FY19, with the highest cut being 8,392 employees in FY23.
Although the reduction in staff has led to a leaner workforce, it has also contributed to improved profitability for the bank. SBI reported a profit per employee of 26.2 lakh in FY24, a significant increase from the 5.8 lakh reported in FY20. The bank’s net profit reached ₹61,077 crore, growing at an annualized rate of 44% between FY22 and FY24.
However, staff expenses for SBI increased by 24% in FY24 to ₹71,237 crore. This was partly due to an additional provision of ₹13,387 crore made to cover the 12th bipartite wage revision settlement. Excluding the one-time wage revision expenses, staff expenses are projected to increase by ₹500 crore per month starting from FY25. The bank’s management expects overheads to range between ₹65,000 crore and ₹70,000 crore for the financial year 2025. Dinesh Khara, Chairman of SBI, emphasized that their employees are recruited from the best talent in the country and are trained to handle the scale, complexity, and compliance requirements of the bank.
The bank’s improved profitability has also led to a higher return on assets (RoA), which has been on an upward trend for the past six years. In FY24, the RoA reached 1.04%, compared to just 0.02% in FY19.
SBI’s stock performance has outperformed the benchmark index over the last six months. While SBI’s stock has rallied by 41%, the Bank Nifty gauge for bank stocks has yielded a return of 9% during the same period.
