State Bank of India

Good evening, everyone. May I request Chairman Sir, MDs and DMD Finance to come on stage, please. So good evening once again and namaste ladies and gentlemen. My name is Sanjay Kapoor and I am the General Manager, Performance Planning and Review Department of the Bank. On the occasion of the declaration of the results of Q1FI24 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 our live webcast. We have with us on this stage our Chairman Shri Dinesh Khara at the centre, our Managing Director International Banking, Global Markets and Technology, Shri C.S. Satti, our Managing Director Retail Business and Operations, Shri Alok Kumar Chaudhary, our Deputy Managing Director of 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 Chief General Managers of different verticals and business groups. To carry forward the proceedings, I request our Chairman Sir to give a brief summary of the Bank's Q1F524 performance and the strategic initiatives undertaken. We shall thereafter straight away go to the 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. Now I would request Chairman Sir to make his opening remarks. Chairman Sir, please.

Thank you. Very good evening, ladies and gentlemen. Thank you for joining the analyst meet post the announcement of the first quarter result of financial year 24. In July 23, IMF upwardly revised the 2023 global forecast to 3% from 2.8% in April. Immediate concerns about the financial stability have been subsided owing to the resolution of the US debt ceiling standoff and strong action by authorities to contain turbulence in US and Swiss banking. However, The recent downgrade of the US FFH over concerns of country's finances and debt burden could trigger bouts of financial volatility with risk of reactions from the market. Against this backdrop, Indian economy continues to exhibit stronger than expected growth momentum with robust domestic investment providing necessary support amidst weaker external sector dynamics. Looking ahead, real GDP growth is expected at 6.5% and financially 24%, aided by the government's thrust on infrastructure spending, traction in domestic demand, revival in corporate investments and healthy bank credit. Headwinds from prolonged geopolitical tensions and slowing external demand are the key risks to the outlook. On the banking front, Credit growth has continued to grow in double digits and became broad-based across sectors. During the first quarter of the financial year 2023-2024, all scheduled commercial banks' bank credit grew by almost 16% by YY and aggregate deposit grew at 12.9%. As demand for credit continues, we expect credit and deposit may grow up by 14-15% in financial year 2024. In the above economic backdrop, let me now highlight a few of the key aspects of the bank's performance in quarter 1 of the financial year 2024. I am pleased to announce that for the fourth quarter in running, we have posted our highest ever quarterly profit of 16,884 crores. Net profit for the first quarter increased by 178.2%. While operating profit at 25,297 crores increased by 98.37%. ROE of the bank for the first quarter improved by 74 basis point on YOY basis to 1.22%. And ROE improved by 1433 basis point to 24.42%. Here also I would like to mention that first quarter is very unique in its character. In the first quarter, one, we do not have the advantage of the carry forward of the recoveries of the previous quarter. And second, in the first quarter, there are, in the last quarter of any financial year, there are invariably various one-offs. So, to that extent, that also inflate the performance in the last quarter of any financial year. So, that is why we are comparing our performance on a YOY basis in the first quarter. So, I thought I will just put across the viewpoint which we have in this context. Most of the core profitability metrics have also improved sequentially. Net interest income for quarter 1 financially 24 increased by 24.71% YOY on the back of the improvement in yields and continuing credit off take. Domestic NIM at 3.47% has also improved by 24 basis point YOY. Non-interest income has increased by 421.73% mainly due to the MTM write-back as well as gains booked in derivative income. Our core income streams, fee-based income are steady and have improved by almost 4%. Operating expenses increased by 23.68% YOY. as we have started building provisions for the wage revision, which have fallen due from November 22. On the business front, the credit growth has been robust across all segments. Domestic advances grew by 15.08% by OI, headlined by detailed personal advances, which grew by 16.46% by OI, and corporate segment, which grew by 12.38% by OI. SME and degree segment also posted a healthy growth in the loan book. It grew at 18.27% and almost 12% driven by the growth in current account deposits and term deposits. Our foreign offices have continued to perform well with good growth in advances as well as in deposit. However, we have generally maintained some kind of pause in the international book For the simple reason that international economies, global economies are facing some kind of challenges and we would like to build up our book depending upon risk appetite in those economies. With regard to asset quality, our gross NPA ratio has come down by 115 basis point YOY and stands at 2.76% and continues to be at its lowest level in more than 10 years. Our net NPA ratio has also declined by 29 basis point and stands at 0.71%. Slippage ratio has improved by 44 basis point YOY and stands at 0.94%. The consistently improving asset quality is also reflected in our credit cost which stands at 32 business point and has improved by 29 business point YOY. We have a well-provided stress book with PCR showing improvement by 23 business point YOY at 74.82%. PCR including OCA improved by 127 business point YOY and stands at 91.41%. Here also I would like to add that when it comes to our loan book being healthy in quality, we are not required to provide for because for the simple reason, one, the quality of the book and secondly, we don't have the aging provisions which we need to provide for. On the restructuring front, our total exposure under COVID resolution plan 1 and 2 stands at 22,666 crores as at the end of financial year, first quarter of the financial year 24. The restructuring book has behaved well with about 11% of the current exposure falling under SMA 1 and SMA 2 category. We are holding sufficient additional provision against the restructured accounts. If you recall, We have been maintaining provision to the extent of about 30% as compared to 5 and 10% requirement prescribed by the RBI for such book. The bank remains well capitalized and our capital adequacy ratio has improved by about 113 basis point YOY and stands at 14.56%. CET1 ratio has improved by 47 basis point to 10.19% and both the ratios are well above the regulatory requirement. Herein I would like to add With the current capital adequacy, we can support the loan book growth to the extent of another additional 7 trillion. Digital continues to be an important customer acquisition engine for the bank across asset as well as liability products. During the quarter, we have sourced 63% of savings bank account and 35% of retail asset accounts digitally through YOLO. We have recently launched UNO for every Indian in which customers of other banks can now access and experience the seamless UPI journey on the UNO. 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 leaders in their respective segments. We will continue to nurture these subsidiaries and see them creating value for their own shareholders as well as the shareholders of SBI. To conclude, I would like to thank all of you for your 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 time. I wish everyone here the best of health and happiness. My team and I are now open for taking your questions. Thank you.

Thank you, Chairman Sir, for the presentation. We now invite 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 financial results only and no questions be asked about specific accounts, please. In case you have additional questions, the same can be asked at the end. We now proceed with the questions and answers session.