State Bank of India

Namaste and good evening ladies and gentlemen. My name is Sanjay Kapoor and I'm the general manager of performance planning and review department of the bank. So on the occasion of the declaration of the Q2 FY23 results of the bank, it gives me immense pleasure to welcome the analysts, investors and our colleagues in person after a gap of nearly three years. I also extend a warm welcome to the analysts, investors and colleagues who have joined this presentation through our live webcast. We have with us on the stage our Chairman, Shri Dinesh Khara, at the centre. Our Managing Director, International Banking and Global Markets and Technology, Shri C.S. Sethi. Our Managing Director, Corporate Banking and Subsidiaries, Shri Swaminathan J. Our Managing Director Risk Compliance and SARGY, Shri Ashwini Kumar Tiwari. Our Managing Director Retail Business and Operations, Shri Alok Kumar Chaudhary. Our Deputy Managing Director Finance, Srimati Saloni Narayan. Our Deputy Managing Directors heading various verticals and Managing Directors of our subsidiaries are seated in the first row and second row of this hall. We are also joined by Chief General Managers of different verticals and business groups. So to carry forward the proceedings, I request the Chairman, sir, to give a brief summary of the bank's Q2FY23 performance and the strategic initiatives undertaken. We shall thereafter straightaway go to the questions and answers session. However, before I hand over to Chairman, sir, I would like to read out the safe harbor statement. certain statements in these slides are forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual outcomes may differ materially from those included in these statements due to a variety of factors. Thank you. Now I would request Chairman Sir to make his opening remarks. Chairman Sir, please. Thank you.

Good afternoon, friends. Thank you for joining this analyst meet post-announcement of the quarter two results of financial year 23. It's actually a pleasure to see all of you in person after a gap of almost three years. I must compliment my finance team for opening this face-to-face interaction, which all of us have been missing in the last three years. A warm welcome to all of you, including those who are connected virtually. We hope you and your family are in best of health. Global economic activity is experiencing a broad base and sharper than expected slowdown. With inflation being higher in developed economies as compared to EMEs, this phenomena is perhaps seen for the first time. The cost of living crisis, tightening financial conditions in most regions, Russia's invasion of Ukraine and the lingering COVID-19 pandemic all weigh very heavy on the outlook. However, in such uncertain and fragile global economic environment, the Indian economy has showed resilience. Indicators of aggregate demand indicate that the onset of the festive season and the pent-up demand kept growth impulse very strong. Several high frequency indicators remain upbeat. The withdrawal of the southwest monsoon has aided travel, hospitality and construction sector too. Electricity generation has picked up in September. Rural demand also has shown very healthy sign. Also, we have seen that the two-wheeler and the three-wheelers and the motorcycles have shown a very encouraging trend. This is actually a reflection of the rural economy. Domestic tractor sales have also picked up sharply to an 11-month high in the month of September. Credit growth in the banking system has continued to grow in double digits in this financial year, as against single-digit growth which we witnessed in the last year. With economic activity gaining momentum, There will be an optimistic outlook for the demand conditions and we expect credit growth to continue in the near term. At State Bank of India, our long-term strategy has been to build sufficient resilience in our balance sheet so as to absorb the volatilities caused by such external events. As a result, We have not only been able to ride through these difficult times, but we have been able to post consistently improving outcomes in business, profitability, and asset quality parameters. I'm pleased to announce that during this quarter, we have posted the highest ever quarterly profit of 13,265 crores. Our business growth numbers are good, and in terms of asset quality, our net NPA has dropped well below 1%. Let me now give some color on the bank's numbers for the quarter. The net profit for the quarter increased almost 74% by OI to 13,265 crores, while the operating profit at 21,120 crores increased by almost 17%. ROE of the bank for the half-year period improved by 15 basis points on YOY basis to 0.76%, though this quarter ROE stands at 1.04%. And ROE improved by 291 basis points on YOY basis to 16.08%. Most other core profitability metrics have also improved over previous year, as well as sequentially. Net-in-test income increased by almost 13%, YOY on the back of the improved credit off-take in all segments and continuous improvement in asset quality. Domestic NIM also improved by almost five basis points YOY and 32 basis points sequentially. Actually, on YOY basis also, we had some one-time, one-offs which were there last year around the same quarter. If we ignore that, then we have actually grown well in this quarter on a YOY basis too, as far as NIM is concerned. Fee income grew by almost 10% YOY. Our cost to asset continues to remain among the lowest in the industry, reflecting our efforts to build long-term cost efficiencies. On the business front, the credit growth has continued to trend upward, as the bank posted a YOY growth of almost 20%, with growth coming from all the segments. Corporate advances grew by 21% plus on a YOY basis with bulk of the growth coming from large corporates, personal retail, also witnessed a decent growth of 19% on a YOY basis with home loan book growing almost at about 15% and other personal loan growing at almost 25%. SME and degree segment advances also posted double digit growth at 11% and 13.24% YOY respectively. Domestic deposit grew by 9.16%, driven by the growth in savings wing deposit and the term deposits. Our foreign offices have continued to perform well with good growth in advances as well as deposit. Advances portfolio at foreign offices in rupee term grew by almost 30%, while in dollar terms it has grown at 18%. And the growth is coming from local lending, trade finance, as well as India-linked loans. Sector-wise, growth has come mainly in OMC, banking and financial services, and IT services. Deposit at foreign offices grew at almost 35%. Coming to asset quality, we continue to post improving outcomes. Our net NPR ratio has come down below 1% mark and stands at 0.80%, only as at the end of Q2 of the financial year 23. with a YOY decline of 72 basis point. Gross NP ratio at 3.52% is down by 138 basis point. Slipping ratio for the quarter stands at 0.33% and is lower by 33 basis point on a YOY basis. Consistently improving asset quality is also reflected in our credit cost, which stands at 28 basis point for the quarter and is down by 15 basis point, YOY. On the restructuring front, as at the end of quarter two of the financial year 23, our total exposure under COVID resolution plan one and two stands at 27,336 crore. The restructure book has behaved well with 9% of the current exposure falling under SMA one and SMA two category. We are holding sufficient additional provision against the restructure accounts. Capital also I would say is fairly okay and we expect that our internal accruals will be adequate to take care of the normal business growth requirements. Our capital adequacy ratio without adding the profit for the current half year is at 13.51% and the CET ratio at 9.53% are well above the regulatory requirement. Digital continues to be an important acquisition engine for the bank across assets as well as liability product. During the quarter, we have sourced 62% of the savings accounts and 45% of the retail asset accounts digitally through Unum. Our subsidiaries have also consistently performed well and continue to create significant value for all the stakeholders and most importantly for the customers. Most of our subsidiaries are leader in their respective segment and we will continue to nurture these subsidiaries and see them creating value for their own shareholders as well as the shareholders of State Bank of India. Now, before I conclude, I thank you all for your continuous support to the bank. We are proud to be part of SBI and consider it 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 a very good health and a very happy weekend. The floor is now open for questions from all of you. Thank you.

Thank you, Chairman, sir, for the presentation. We now request questions from the audience. For the benefit of all, we request you to kindly mention your name and company before posing the questions. To accommodate all the questions, we request you to restrict your questions to maximum two at a time. Also, kindly restrict your questions to the quarterly results only, and no questions about specific accounts, please. In case we have additional questions, the same can be asked at the end. We now proceed with the question and answer session. And the first question is?