State Bank of India

Good day and welcome to State Bank of India's Q3 FY23 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 you need assistance during the conference call, please signal an operator by pressing star then zero on your pressed on phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sanjay Kapoor, General Manager, Performance Planning and Review from State Bank of India. Thank you and over to you.

Namaste and good evening ladies and gentlemen. My name is Sanjay Kapoor. I am the General Manager, Performance Planning and Review Department of the Bank. On behalf of the top management of SBI, I extend a warm welcome to all of you joining us today on SBI's Q3 FY23 earnings conference call.

On the call today, we have with us our Chairman, Mr. Dinesh Khara, Mr. T.S. Sethi, Managing Director, International Banking, Global Markets and Technology, Mr. Swaminathan J., Managing Director, Corporate Banking and Subsidiaries, Mr. Ashwini Kumar Tiwari, Managing Director, Risk Compliance and Salty. Mr. Alok Kumar Chaudhary, Managing Director, Retail Business and Operations. Mrs. Saloni Narayan, Deputy Managing Director, Finance. To carry forward the proceedings, I request the Chairman Sir to give a brief summary of the Bank's UGFI 20C performance and the strategic initiatives undertaken. We shall thereafter straight away go to the question and answer threshold. However, before I hand over to the chairman, sir, I would like to read out the safe harbor statement. Safe harbor provision. 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 outcome 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. Thank you. Thank you very much. Good evening, ladies and gentlemen. Thank you for joining this anniversary announcement of the Apartheid Resort of the Peninsula 23. The Indian economy has exhibited remarkable resilience through 2022 in the face of the deteriorating global situation triggered by Russia-Ukraine war, monetary policy tightening and recurring base of the pandemic. On the back of the strong and macroeconomic fundamentals. An important factor in the overall outcome has been the measured response of the monetary and fiscal policies in sharp contrast to the aggressive tightening worldwide. The new year brings hope for continued momentum in India's growth story backed by the sustained strength in domestic demand. The World Bank has gone on record to say that the nation was well placed to steer to any potential global advent in 2023. The IMF has also said that India remains the bright spot and will account for the significant portion of global growth in 2023. Several high-frequency activity indicators like vehicle sales, petroleum consumption, railway passenger traffic, air traffic, car fuel revenue collections, petrol sales have all shown improved IOI momentum in Q3 of financial year 2023. GST revenue also continues to remain robust with 15% higher revenue in Q3 compared to the same period last year. In FY23, credit growth has continued to grow in double digits. The incremental 9-month credit growth has doubled in FY23 compared to FY22. Credit growth in the system is currently at 14.9% as against 9.2% in last year. The good thing is that credit growth is broad-based and not limited to a few industries or sectors. So we expect the pace to continue in the next financial year also. But some auditions can happen. At State Bank of India, we have always maintained that our long-term strategy is to build sufficient resilience in our balance sheets. So while we will continue to pursue growth and core operating income, we have also been proactive in in identifying any potential risks and build adequate provisions for the system. And our operating results for the quarter are aligned with our long-term strategy. I am pleased to announce that for the second quarter in running, we have again posted our highest ever quarterly profit at Rs. 14,205 crores. Our business growth numbers are strong and in terms of protect quality, our growth and have dropped to its worst level in more than six years. Let me now give some color on the bank's number for this quarter. Net profit for the quarter increased by 68.47%, while operating profits at 25,219 crores increased by 66.16%. However, the bank For the 9 months period improved by 23 basis points on YOY basis and it stands at 0.87% and ROE improved by 458 basis points on YOY basis and it is at 18.59%. Most other core profitability metrics have also improved over previous year as well as sequential. Net interest income increased by 24.05% YOY on the back of improvement in yield and continuing credit offtake. Domestic NIM also improved by 29 basis points by a while and 14 basis points sequentially. Non-interest income grew by 32.21 to 2% by a while. Operating expenses increased by 16.69%. As we have started grading poison for the rate revision, it has fallen due from November 22. Other than that, our overhead expenses as well as half costs are within control, and our cost to assets continues to remain among the lowest in the industry, reflecting our effort to build a long-term cost efficiency. On the maintenance front, the growth momentum in domestic credit uptake has continued in this quarter also, with growth coming from all segments. Domestic advances grew by 16.91% by OI, headlined by retail personal advances, which grew by 18.10% by OI, and corporate segments, which grew by 18.08% by YY. SME and RE advances also posted a vertical float at 11.52% and 14.16% by YY, respectively. Our personal retail loan book, excluding housing, segments have crossed the milestone of 5 trillion. Domestic deposit grew by 8.86% by YY, driven by growth in savings and deposits and term deposits. Our foreign officers have continued to perform well with good growth in advances as well as deposits. Coming to asset quality, we continue to post improving outcomes. Our gross NPA has dropped below 1 trillion and stands at 98,347 crores. In terms of ratio, our GNPA has come down by 136 basis points on a YY basis and stands at 3.14%. Our net LCA ratio has also declined by 57 basis points and stands at 0.77. Slippery ratio for the quarter stands at 0.41%. Consistency improving asset quality is also reflected in our credit cost, which is at 21 basis points for the quarter and is down by 28 basis points on BioWare basis. On the restructuring front, Our total exposure under COVID Resolution Plan 1 and 2 stands at 26,035 crores. As at the end of 4.3 of financial 23, the resubscription book has behaved well with almost around 10% of the current exposure falling under SMA 1 and SMA 2. We are holding sufficient additional positions against the resubscribed account. The bank remains well capitalized and we expect our internal accruals will be adequate to take care of the normal business growth requirements. Our capital adequacy ratio, without adding profit for the 9 months, stands at 13.27% and CET ratio at 9.26% are well above the regulatory requirements. Digital continues to be an important acquisition engine for the bank across assets as well as liability products. During the quarter, we have closed 64% of the savings bank accounts and 41% of the retail asset accounts digitally through humans. 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 the respective segment. We will continue to nurture these subsidiaries and see them creating value for their own shareholders and as well as the shareholders of SBI. Now before I conclude, I thank you for your continuous support to the bank. We consider it a privilege to be able to contribute towards the growth of our economy. We remain committed to reward your trust in us with superior sustainable returns over the long term. I wish everyone good health and very happy return. The floor is now open for your questions. Thank you.