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. On the occasion of the declaration of the FY23 results of the bank, it gives me immense pleasure to welcome the analysts, investors and our colleagues for an in-person meeting. I also extend a warm welcome to the analysts, investors and colleagues who have joined this presentation through a live webcast. We have with us on the stage our Chairman, Shri Dinesh Khara, at the center. Our Managing Director, International Banking and Global Markets and Technology, Shri C.S. Satti. Our Managing Director, Corporate Banking and Subsidiaries, Shri Swaminathan J. Our Managing Director, Risk Compliance and Sarji, 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 of this hall. We are also joined by CFO and Chief General Managers of different verticals and business groups. To carry forward the proceedings, I request the Chairman, Sir, to give a brief summary of the Bank's FY23 performance and the strategic initiatives undertaken. We shall thereafter straightaway go to questions and answer session. However, before I hand over to the Chairman, Sir, I would like to read out the Safe Harbour 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. Thank you very much.

Very good evening to all of you. Thank you very much for joining this analyst meet post the announcement of our financial year 23 annual results of the bank. As you are all aware that the global economy is passing through various uncertain times with the cumulative impact of adverse shocks of the past three years, most notably COVID-19 pandemic geopolitical situations in Ukraine, manifesting and enforcing situations spurred by the pent-up demand, lingering supply disruptions and commodity price spikes. Inflation reached multi-decadal high last year in many economies, nudging central banks to tighten aggressively to bring it back towards their target and keep inflation expectation anchored As a result of all this, the baseline focus of the global growth is to fall from 3.4 to 2.8 and then to rebound to 3% in 2024. In the backdrop of all this, India continues to remain resilient to various adverse external environment going to large domestic market. Despite all the headwinds, India's GDP in financial 23 is estimated to grow at 7%, driven by investment and private consumption. And going forward, the economic activity would be supported by improving rural demand and the government's thrust on infrastructure spending. We also expect the revival in the corporate investment, which will give us opportunities of the healthy bank credit, and also will lead to moderating the commodity prices. Despite the increase in interest rate and its transmission, credit growth has continued to grow in double digit and has been broad based across all the sectors in financial year 23. During financial year 23, all scheduled commercial bank credit grew by almost 15% on a YOY basis. as against 9.6% YOY in the financial year 2022. Aggregate deposit of all scheduled commercial bank grew at about 9.6% compared to the last year growth of 8.9% YOY. In the union budget for financial year 2024, several steps have been announced to push up the capital investment in the country, which will actually boost the credit demand in the economy. And we expect the credit growth to continue in financial year 24 also, though with some moderation, which can perhaps happen. In the above backdrop, let me now share with you the bank's numbers for financial year 23, as well as for the quarter 4 of the financial year 23. I am happy to share with all of you that the bank has For the third quarter in running, we have posted the highest ever quarterly profit at 16,695 crores. And for the full year, our net profit has crossed the landmark number of Rs. 50,000 crore, which is the highest ever by any bank in India. Net profit for financial 23 increased by 58.58% by OI, while operating profit at 83,713 crore increased by 11.18%, ROI. ROE of the bank for the year improved by 29 basis point on YOY basis to 0.96 and ROE improved by 551 basis point to 19.43%. Here I would also like to mention that for three quarters in a row our ROE has been more than 1%. For the quarter four of Net profit stands at 16,695 crore which is higher by 17.52% sequentially and 83.18% on a YOY basis. Most other core profitability metrics have also improved over the previous year as well as sequentially. Net interest income for the year has witnessed a growth of 19.99%. On the back of improvement in yields and continuing credit of take. Domestic NIM also improved by 22 basis point on a YOY basis. Non-interest income declined marginally by 9.73% essentially attributed to the MTM loss of rupees more than 7000 crore which we suffered in the first quarter. Other than that, our core income streams, fee-based incomes have remained intact and have improved by almost 6.84% YOY. Operating expenses increased by 13.68% YOY as we have started building provision for the wage revision which has fallen due effective from November 22. There is some increase in the overhead expenses which is essentially attributed to the higher tech-related expenses like expenses on IT, development, mobile banking, ATMs, and also higher DICGC premium because of the growth in deposit, which we have witnessed in the last financial year. On the business front, the credit growth has been robust across all the segments. Domestic advances grew by 15.38%. Headlined by retail personal advances which grew by 17.64% and corporate segment grew by almost 12.52% by OI. SME and library segment advances also posted healthy double digit growth at 17.59% and 13.31% respectively. Domestic deposit grew by 8.50% by OI driven by the growth in savings bank deposit and term deposits. Our foreign offices have continued to perform well with good growth in advances as well as in deposit. With regard to the asset quality, our gross NPA ratio has come down by 119 basis point and stands at 2.78%, which is its lowest level in more than 10 years. Our net NPA ratio has also declined by 35 basis points and stands at 0.67%. Slippage ratio for the year stands at 0.65%. The consistently improving asset quality is also reflected in our credit cost, which stands at 32 basis points for the year and is down by 23 basis points on a YOY basis. We have a well-provided stress book with PCR showing improvement by 135 basis point at 76.39%. PCR including OCA improved by 171 basis point YY and stands at 91.91%. On the restructuring front, our total exposure under COVID resolution plan 1 and 2 stands at 24,302 crores as at the end of quarter 4 of financial year 23. The researching book has behaved well and when we look at our SMA-1 and SMA-2 also in this category, they are much within the range of about 11%. As against this book, we have already provided 30% as you are all aware as compared to the 15% requirement of RBI. So we actually have insulated our book from any potential threat from the restructuring which might happen, which have already been, the restructured book has already been taken care of by additional poison, but the book is behaving much better than what we have seen in our SMA book otherwise or in the stress book overall. The bank has remained very well capitalized and we have sufficient headroom to take care of the normal business growth requirements. Our capital adequacy ratio has improved by 85 basis point YOY and stands at 14.68%. CET1 ratio has also improved by 33 basis point to be at 10.27% and both the ratios are well above the regulatory requirements. Digital continues to be an important customer acquisition engine for the bank across assets as well as liability products. During the year, we have sourced 64% of our savings bank account and 35% of our retail asset accounts digitally through UNO. We have embarked upon a journey of creating a digital bank of choice within the bank when we have launched our Euro 2.0. Our subsidies have also consistently performed well and continue to create significant value for all the stakeholders and most importantly, the customers of the bank. Most of our subsidies are leaders in their respective segments. We will continue to nurture these subsidies and see them creating value for their own shareholders as well as the shareholders of SBI. Before I conclude, I thank you all for the continuous support to the bank. We consider it as a privilege to be able to contribute towards the growth of our economy. We remain committed to rewarding your trust in us with superior sustainable returns over the long term. I wish everyone here the very best and now the floor is open to all of you for the questions. Thank you.

Thank you Chairman sir for your opening remarks. We now invite questions from the audience and 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 financial results only and no questions about specific accounts please. In case you have additional questions, the same can be asked at the end.