State Bank of India

Good day and welcome to State Bank of India Q4 FY22 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should we meet a suspense during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Pawan Kumar Kedia, General Manager, PPR from State Bank of India. Thank you and over to you, Mr. Kedia.

Thank you. Good evening, ladies and gentlemen. I am Pawan Kumar Kedia, General Manager, Performance Planning and Business. On behalf of the top management of SGI, I extend a warm welcome to all joining us today on SGI Q4 FY22 earning conference call. On the call today, we have with us our Chairman, Mr. Dinesh Kumar Tara, Mr. T.S. Satish, Managing Director, Retail and Digital Banking, Mr. Ashwini Bhatia, Managing Director, Corporate Banking and Global Markets, Mr. Swaminathan Jain, Managing Director with Compliance and Stress, S.S.P. Logan Group, Mr. Ashwini Kumar Tiwari, Managing Director, International Banking, Technology and Subsidy, Mr. Alok Kumar Gaudi, Deputy Managing Director, Finance. Mr. Sivam Dixit, Chief General Manager, Financial Control. And Mr. Karanji Tatra, Chief Financial Officer. Before I dismiss our chairman sir to give a brief summary of the bank Q4 FY22 performance and the strategic initiative undertaken, I would like to read out the same forward statement. Certain statements in these slides are forward-looking statements. These statements are based on management's correct expectations and are subject to uncertainty and change in circumstances. Actual outcome may differ materially from those included in these statements due to a variety of factors. Thank you. Now I would request our chairman sir to make his opening remarks. Thank you.

Good evening friends. Thank you for joining this conference call before a long weekend. It's a pleasure to connect with you all again in better circumstances with the effects of the pandemic having been effectively addressed through a vaccination drive of epic proportions. I thank all our stakeholders including our customers, shareholders, analysts, employees and the broader ecosystem for being supportive of our efforts and initiatives in our journey. I also take this opportunity to express my heartfelt gratitude to our shareholders and our financial market participants were supported the bank through the challenging times in the recent past. The recovery of the global economy was hampered in Q4 of 2021 due to the resurgence of Omicron variant which led many countries to reinforce lockdowns, tower restrictions, and other containment measures which absolutely disrupted economic equity and supply chains. More recently, the situation in Ukraine has fallen their way down on the global trade dynamics and has led to squandering of oil and other commodity prices. The domestic economic scenario has also been affected by geo-political events. RBI has lowered the financial accountancy GDP growth forecast to 7.2% from the earlier guidance of 7.8%. While possible upsets could emanate from the sustained domestic demand, moment thrust on capex, a normal monsoon, And healthier corporate balance sheets, the heightened geopolitical tensions, do pose larger risks to the GDP growth. Amidst these extraordinary global and financial challenges that the board has faced in financial year 2022, the bank has again delivered good outcomes in various optimality and effect quality parameters. This is a vindication of the flexibility and strength of our operating model and the stupendous effort put in by the team in the State Bank of India. This has helped us to close Financial Year 2022 with robust results, which affirm our commitment to maintain our leadership position and set the goal of maintaining the momentum in Financial Year 2023. I would like to highlight a few key areas of our performance. The bank has logged highest travel profit of Rs. 31,626 for the Financial Year 2022, which is an increase of 65.2%. over financial year 21. The return on effect at 0.67% has witnessed an increase of 19 basis points, while ROE at 13.92% has increased by 298 basis points over the previous year. The bank's deposit and advances grew by 10.06% and 11% respectively in financial year 22, which in absolute terms works out to 3.70 lakh crores and 2.79 lakh crores respectively. Our retail personal book, I2P Sandlack Road, is growing at a three-year target of 16%, and we have also maintained our leadership position in home loan and auto loan. The bank's NII for financial year 2022 has shown a YOY increase of 9.03%, while NIM for domestic operations is taxed at 3.36%, that is 10.5% in March 2021, reflecting the bank's rebellious during the challenging year. As far as asset quality is concerned, the bank's gross NPA and net NPA as of March 22 were at 3.97% and 1.02% respectively, which is an improvement over financial 21 numbers of 4.98% and 1.50%. The slippage ratio for financial 22 is 0.99%, 19 basis points lower than March 21. The bank's ability to bring down the net NPA around 1% is a result of focus and continuous attention in this area. We have been able to contain the credit costs at 0.55% as against 1.12% as on March 21. An improvement of 57 basis points we have seen in this particular area. We have been constantly collaborating our lending strategies to maintain the quality of loan book which is accepted in our corporate exposure with 89% of the book being in investment grade. The book continues to remain well capitalized with CET1 ratio at 9.94% and capital adequacy ratio of 13.83% against the regulatory requirement of 8.6% and 12.10% respectively. The bank has also been able to keep the RWA to total assets below 50%, indicating the quality of the portfolio. Our journey toward digital leadership continues. We have been witnessing increasing digital adoption by the bank's customers and now more than 95% of the suggestions are routed to alternate channels. The adoption of UNO has significantly increased with registration costing 4.83 crores. UNO has created a significant value for the bank and we are now moving towards UNO 2.0 with many more advanced features amongst its overseas offices. Nine foreign offices and subsidies have gone live with UNO Global. I am happy to announce equity dividends of 710%. That is Rs. 7.10% per share. We are aware of the areas where we need to improve our performance further. With economic activity continuing to improve and the reverse of higher credit optics, the bank is aiming to increase its market share in advances. We are also focusing on current account deposit to improve our KASA ratio. Our long-term goals are very clear and we are committed to maintain our liberal owner position in the industry. Now, before I conclude, I thank you all for your continuous support to the bank. We are proud to be part of SBA and consider it as a privilege to be able to contribute towards the growth of our economy and the bank. We remain committed to reward your trust in us with superior sustainable returns over the long term. I wish everyone here good health and a very happy weekend. The floor is now open for your questions.