State Bank of India

Namaste and good evening, ladies and gentlemen. I am Sanjay Kapoor, General Manager of Performance Planning and Review Department of the Bank. On the occasion of the declaration of the bank's quarter three for FY24 results of the bank, I am delighted to welcome the analysts, the investors, and the colleagues for this in-person meeting. I also extend congratulations 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 center. Our Managing Director, International Banking, Global Markets and Technology, Shri C.S. Sethi. Our Managing Director, Corporate Banking and Subsidiaries, Shri Ashwini Kumar Tiwari. Our Managing Director, Risk, Compliance and Stress Assets Resolution Group, Sri Alok Kumar Chaudhary. Our Managing Director, Retail Business and Operations, Sri Vinay M. Tonse. 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 front 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 Chairman Sir to give a brief summary of the bank's quarter three FY24 performance and the strategic initiatives undertaken. We shall thereafter straightaway go to the question and answer session. However, before I hand over to the 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 evening, dear friends. Thank you for joining this and this week today. I would like to start by thanking the support of all our stakeholders, including our customers, shareholders, employees, and the broader ecosystem. Without their support, we would not have been able to achieve what we could. Fairness to all our stakeholders remains at the crux of the bank's culture. which in turn has helped us in creating sustainable value. Let me start with a brief description of the present global and domestic economic scenario. Global economy is projected to grow at the rate of 3.1% in 2024 and 3.2% in 2025, owing to greater than expected resilience in the US and several other emerging economies. While global economy is showing resilience, the projected growth is still below the historical average of 3.8% for the 20 years starting from 2000. While the likelihood of a hard lending has receded, still there are certain risks that need to be monitored. New commodity price spikes from the geopolitical shocks, Supply disruptions and persistent underlying inflation could prolong the tight monetary conditions. Against this backdrop, the outlook for the domestic activity is brightening on account of the sustained buoyancy in the services, consumer and wages optimism, public spending on infrastructure, and the underlying strength of the financial sector's balance sheet. Consumer confidence has improved, with uptick in most of the macroeconomic conditions. The union government at a historically unprecedented rate, and it has taken the overall public sector capital investment from almost about 6 trillion in 2015 to 18 trillion in 2025, as per the budget estimates, which is a jump of almost three times. Gross tax to GDP is in financial year 25 is projected to touch 11% plus, the highest ever in 16 years. GST monthly threshold has moved up to 1.64 trillion and even in the previous month of January, we have seen a level of 1.67 trillion. CPI inflation is expected to moderate in coming months. On external front, the current account deficit is modest with foreign exchange reserves providing a strong buffer. IMF has recently updated India's GDP outlook growth for the year 2024 to 6.7% from 6.3% earlier, underpinning the growth potential of the Indian economy. While recognizing the global risk and the volatility in financial markets, that Real GDP growth is expected to be 7.3% in financial year 2024. Interim budget has estimated the nominal GDP growth of 10.5% for the year 2025. On the banking front, the deposit growth has rebounded, but sustained credit growth momentum has increased, the wedge between deposit and the credit growth. As on 12th of January, also due to commercial bank, credit grew by almost 20% as compared to 16% last year. And the deposit grew by 13% as compared to almost 11% last year. Latest credit growth numbers reveal the sustained pickup across agriculture, MSME and services. Coming to the bank's performance, once again we have delivered stellar numbers. Our net profit in nine months of the financial year 24 stood at 40,378 crores, which has witnessed an increase of 20% plus over nine months of financial year 23. This is despite providing for a wage revision of 12,718 crores during the current financial year, as per the bipartite wage settlement at the rate of 17% wage hike. Further, I'm happy to share that our net profit for the quarter 3 of financial year 24 stands at 9,164 crores. After absorbing the additional liability to the tune of Rs. 7,100 crore in a single quarter as a one-time exception item. This comprising of two sub-items, firstly Rs. 5,400 crore, which is on account of an increase in pension and addressing the anomaly which used to be there between the employees who retired many years back. Some of the employees were getting pension at the rate of 40%, while others were getting pension at the rate of 50%. This matter was subjudiced for a fairly long time, and it is almost likely to get resolved soon. And with that in mind, we had a very clear visibility in terms of the likely liability, and we have decided to provide for the same in the current quarter. Secondly, we have also provided for 1,700 crore towards the dearness relief neutralization, for the pre-2002 retirees and family pensioners. Our ability to absorb the above liabilities without significantly impacting the long-term profitability outcomes of the bank demonstrates the strength of our balance sheet and also the reflection of our philosophy that we must ensure that the balance sheet stays strong under all conditions. ROA of the bank at 0.94% for 9 months of financial year 2024 has improved by 7 basis points over 9 months of FY23. The ROE for 9 months of FY24 stands at 19.47%, which has improved by 88 basis points over 9 months of FY23. We have been consistently delivering ROE in excess of 15% for last 6 quarters. Our aspiration from our current position of strength is to sustainably deliver ROE a ROE of more than 15% through various business cycles. The cost-to-income ratio of the bank stands at 57.35%, including wage raise and poison, and excluding the impact of one-time exceptional item of pension liabilities and dearness relief neutralization. Overheads have been under control and have been shown a decline of 3.10% sequentially. The underlying driver for the sustainable step step up in the profitability profile of the bank, have been the unmatchable liability franchise with 48 crore plus customers, comprising nearly 34% of the Indian population. Our customer-centric approach, the process-oriented culture of the bank, strengthened underwriting processes and correct pricing of the risk have also contributed to the sustainable profitability. We are mindful of our liability portfolio as it provides a stable stream of resources for us. We continuously monitor the concentration of our deposit profile daily, ensuring that the dependency on the wholesale funding is contained within the prescribed level. The differential rate of deposits and the CDs are just around 13% of our total deposits. We retain reasonable reserve resource in the form of liquid assets Over and above the CRR and the SLR requirement to meet the future contingent demand and broad basing the deposit mix. Unencumbered excess SLR stands at about 4 trillion as on 31st of December 23. Liquidity coverage ratio at about 131% as on 31st of December 23 is well above the regulatory benchmark. I am happy to highlight that the credit growth has been robust. across all the segments. Our retail personal loan book is more than 13 trillion, is growing at 15% plus YOY, with an industry-leading asset quality. The growth in Agri, SME and corporate segment has witnessed a healthy growth of 18% plus, 19% plus and almost 11% respectively. I am glad to share the progress we are making in digital banking. 59% of the savings bank accounts were opened through UNO in 9 months of financial year 24. We are also leveraging analytics with significant business of rupees, 95,000 crore being sourced through analytical leads showing growth of 37% YOY. With regard to asset quality, our gross NP ratio has improved by 72 basis point YOY and stands at 2.42% as at December 23rd. and continues to be at the lowest level in more than 10 years. Our net NPA ratio has also improved by 13 basis points and stands at 0.64%. Slippery ratio for 9 months of financial year 2024 has improved by 5 basis points YOY and stands at 0.67%. The consistently improving asset quality is also reflected in our credit cost. For 9 months of financial year 2024, it stands at 0.25%. and has improved by a 12 basis point on a YOY basis. We are well provided for our loan book with PCR, including OCA standing at 91.49%, and PCR for quarter 3, Peninsula 24 standing at 74.17%. While we are glad about the outcome in the current quarter, we are also conscious of the areas for further improvement. On the liability side, we continue to focus on increasing our share in current account, while maintaining our leadership position in savings deposit. Our CET1 ratio, after considering drawback of 9-month profit, is at 10.38%. Additionally, the current ROE profile of the bank is above the credit growth trend, which will lead to CET1 incremental accretion. However, the bank is open to raising equity capital if the growth trends are higher than expectations. Our subsidies are also consistently performing well and continue to create significant value for all the stakeholders, and most importantly, for the customers. Concluding my opening remarks, I want to thank you all for your support to the Bank. The Bank, while pursuing its own progress, contributes to the progress and economic growth of the broader ecosystem. We remain committed to reward your trust in us with superior sustainable returns over the long term.

My team and I are now open to taking your questions. Thank you very much. To accommodate all questions, we request you to restrict 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 of additional questions, the same can be asked at the end. We will now proceed with the question and answer session. Thank you, sir. Thank you.