State Bank of India

Good evening, everyone, 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 behalf of State Bank of India, I am delighted to welcome the analysts, the investors, colleagues, and everyone present here today on the occasion of the declaration of the results of the bank for the financial year ending 2024. I also extend a very warm welcome to all the people who are accessing the event through our live webcast. We have with us on this stage our Chairman, Shri Dinesh Khara, at the center, our Managing Director, International Banking, Global Markets and Technology, Shri CS80, our Managing Director, Corporate Banking and Subsidiaries, Shri Ashwini Kumar Tiwari, our Managing Director, Risk Compliance and Stressed Assets Resolution Group, Shri 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 rows of this hall. We are also joined by the 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 financial year 24 performance and the strategic initiatives that have been undertaken in this regard. We shall thereafter straightaway go to questions and answers session. However, before I hand over to the Chairman, sir, I would like to read out the safe harbor statement. Certain statements in today's presentation may be 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 Slater to make his opening remarks.

Thank you. Thank you very much. Good evening, friends. Thank you for joining this analyst meet. I would like to start by thanking all of you. and all our stakeholders, including our customers, shareholders, employees, and the broader ecosystem for their support and helping us in creating the sustainable value for the economy. Let me first start with a brief description of the present global and domestic economic scenario. Global growth remains resilient with easing inflationary pressures and tight employment conditions in spite of geopolitical and extreme weather event risk. IMF, in its latest April 24 World Economic Outlook, raised the global growth forecast for 24 to 3.2%, 10 basis points higher than in its January 24 update, and expect the global economy to grow at the same pace in the year 25. Global headline inflation is expected to fall from an annual average of 6.8% in 2023, to 5.9% in 2024 and further to 4.5% in 2025, with advanced economies returning to their inflation targets sooner than emerging markets and developing economies. Commodities and energy prices can drag the economic and growth prospect by infusing sudden shocks on the supply side, a collateral impact of escalating geopolitical tensions at multiple fronts. In India, the conditions are, however, shaping up for an upshift in the real GDP growth, backed by strong investment demand and upbeat business and consumer sentiments. CPA inflation has gravitated to 4.9% in March after averaging to 5.1% in preceding two months. CPA inflation is expected to moderate in ensuing months and is estimated to taper to 4.5% and financially 25%. compared to 5.4% average in FY24. In FY24, credit off-take of all scheduled commercial banks recorded a growth of almost 20%, while deposit grew by about 13.5%. And the momentum, with some moderation, is expected to continue in FY25 too. I'll now discuss the bank's performance. Once again, we have delivered excellent numbers. I'm happy to share that our net profit for financial year 24 is the highest ever at Rs. 61,077 crores, showing an increase of 21.59%. Our net profit for the quarter 4 of the financial year 24 also stands at Rs. 20,698 crores, which has increased by 125% sequentially. This is despite incurring wage revision expenses of Rs. 13,387 crore during the current year period as per the bipartite wage settlement and after absorbing the additional liability to the tune of Rs. 7,100 crores relating to pension liabilities and the DR neutralization in the third quarter as a one-time exceptional item. Our ability to absorb the above liabilities without significantly impacting the long-term profitability is Outcomes of the bank demonstrate the strength of our balance sheet. ROE of the bank is now at 1.04% for the whole of the financial year 24. It has improved by 8 basis points over financial year 23. The ROE for the financial year 24 is at 20.32%, which has improved by 89 basis points over financial year 23. We have been consistently delivering ROE in excess of 15% for last 7 quarters. Our aspiration from our current position of strength is to sustainably deliver the ROE of more than 15% through the business cycles. The cost-to-income ratio of the bank is at 55.66%, including the wages and expenses, and excluding the impact of the one-time exceptional item of pension liabilities and dearness relief neutralization in Q3 of FY24. Excluding the wage revision and one-time exceptional item, the cost-to-income ratio is actually at 49.34%, which is an improvement of 315 basis points over financial year 23. Non-interest income has shown a growth of 41% plus in financial year 24 over financial year 23. We believe sustaining our profitability at this level highlights the resilience of the underlying value drivers of the bank. The underlying drivers for the sustainable step-up in profitability profile of the bank has been the unmatched size and reach of the bank, with 50 crore plus customers comprising nearly 35% of the India's population. This is a testament of the continuous trust reposed in us by our valued customers. Our customer-centric approach, the process-oriented culture of the bank, strengthened underwriting processes and correct pricing of the risk have all contributed to the sustainable profitability. Our deposits have grown by 11% by OI and term deposits have grown more than 16% by OI. We are mindful of our liability profile as it provides us a stable stream of resources for We continuously monitor the concentration of our deposit profile daily, ensuring that dependency on the wholesale funding is contained within the prescribed levels. We retain reasonable reserve resources in the form of liquid assets over and above the CRR-SLR requirements to meet the future contingent demands and broad-basing the deposit mix. Unencumbered excess SLR was to the tune of about 3.7 trillion as of 31st March 2014. And the liquidity coverage ratio stood at 124% as of 31-3-24. All this is above the regulatory benchmark. I am happy to highlight that the credit growth has been robust across all the segments. Our retail, agri and SME advances have crossed 20 trillion. Out of the above, retail personal advances itself constitute almost 13.5 trillion dollars. Agri advances are more than 3 trillion and MSME advances are more than 4.33 trillion. They are all growing at a pace of 14.68%, 17.92% and 20% YOY respectively. The corporate segment is also showing healthy growth at more than 16% growth on a YOY basis. I am glad to share the progress we are making in the digital banking sector. 61% of our savings bank accounts were opened through Yono in the financial year 2024. And we are also leveraging analytics to its hilt, which has led to the significant business growth. And now that number stands at 1.37 trillion. All this is sourced through analytical leads showing growth of almost 32% on a YOY basis. As far as the asset quality is concerned, our gross NPA ratio has improved by 54 basis point YOY and stands at 2.24% as at March 24 and continues to be its lowest in more than 10 years. Our net NPA ratio has also improved by 10 basis point and stands at 0.57%. Slippage ratio for financial year 24 has improved by 3 basis point YOY and stands at 0.62%. The consistently improving asset quality is also reflected in our credit cost for financial year 24 which stands at 0.29%. It has improved 3 basis points on a YY basis. We are well provided for our loan book with PCR including OCA standing at 91.89% and PCR excluding OCA standing at 75%. Our employees are recruited from the best talent in the country and are trained to handle the scale, complexity and the compliance requirements of the bank. SBA is the employer for life and most of our employees really believe in this. The attrition rate for the bank is only 1.43%. We take great pride in the process-oriented culture of the bank. While we are glad about the outcomes in the current quarter, We are also conscious of our areas of further improvement. On the liability side, we continue to focus on increasing our share in current account while maintaining our leadership in the savings bank deposits. The cost base of the bank is high. However, the same also reflects our focus on compliance and establishment costs. We aim to lower our cost-to-income ratio by focusing on the income side. Our CET ratio is CET1 ratio stands at 10.36, which is the highest ever since the implementation of the Basel III norms. Additionally, the current ROE profile of the bank remains above the credit growth trends, and hence we foresee CET1 acquisition going ahead. However, the bank is open to evaluate the options of raising equity if at all the growth trend so warrants. Our subsidiaries are also consistently performing well and continue to create significant value for all stakeholders, and most importantly, for the customers of the bank. To conclude, I once again would like to thank you for the support which you have extended. The bank, while pursuing its own progress, contributes to the progress and growth of the economy and its countrymen. We remain committed to rewarding your trust in us with superior sustainable returns over the long term. My team and I are now open for taking questions from all of you. Thank you very much.

Sir, compliments to you, sir. One of the most, I think, outstanding and fantastic results for the State Bank of India. And when we are going in the range of almost about 110 lakh crores of the operating profit on the yearly basis, I mean, going more than 1 lakh annualized basis, maybe 1 lakh 10,000 or 15,000 crores. So, all this net NPA and these figures look very small as compared to our profit generating capacity. Having said that, sir, my first question is on the recent RBI guidelines on the provisioning. Now, Our total, I think, infra and the project which are under implementation as well as might have been completed also, total loan including CRE altogether may be about 4,50,000 crores. Out of that, how much amount do you feel will come under the purview of these guidelines if it is implemented? And what is the ballpark figure by which we will require to increase our Capital adequacy, because otherwise also our capital adequacy as compared to some of the peer, I would not call peer bank, but smaller public sector banks, is much higher than our, and this has always been a concern. Though with this profit added for this year already in the CRAR, we are still at around 14.28%. So going forward and if this particular guidelines gets implemented, where do we stand?

Thank you very much, first of all, for all your compliments. The second question which you have raised is essentially relating to a discussion paper which has been floated by the Bank of India. Well, of course, we have yet to evaluate it in all entirety. but based upon our experience with Reserve Bank of India for the last couple of years. Now, RBI is quite a receptive regulator. They are not ignoring the viewpoint of the banking industry, and I'm sure they would certainly be cognizant of the viewpoint which will be expressed by IB as well as State Bank of India in its individual capacity as well. So I would not like to hazard any guess, but nevertheless, whatever little back-of-envelope calculation we have done, based upon that, I can only assure you, considering the fact that we still have got almost about 32,000 crore worth of non-NPA provisions holding in our book, and such kind of pockets are many, but I don't want to discuss much of them. But I would only like to say that whatever is possible, In the wildest of the thought, whatever could be the additional provision, we can absorb it in no time. That is one thing which I would like to say. As far as your assessment in terms of our project loans, I would only like to correct that it is only about 1.21 trillion. It is not somewhere around 4.5 trillion.

So that is one thing.

So I think this is a project loan. This is essentially applicable for the project loans. But also it has given a glide path. It has to be done in about three years' time. So it will leave sufficient room, but nevertheless, whatever back-off envelope calculation is there, we are not really worried. To be very precise, what we had seen when the ECL paper, ECL discussion paper had come, I remember during that time also, in one of the analyst meet like this, some questions were raised. ECL has not yet become a crystallization as of now. Let us see when it gets crystallized. But nevertheless, it will be much, much less than what the annual outlay was for ECL. So it is, I think we are not worried. So I will only say that on a standalone basis, we are not worried. And of course, if at all, such kind of eventuality will come and will actually get frozen. We will also revisit the pricing if need be.

Sir, what could be the intent? Whether the RBI is thinking? Because such a sudden and that too straight away with the 5% provisioning may be over the period of 2-3 years. Are they fearing that some of these projects may not get completed in time?

The way I read, I will share with you. The intent seems to be that RBI has got some concerns about the right pricing of the risk by some of the lenders. So when the lenders start pricing a 15-year term loan with T-bill, it will naturally raise the concern with any regulator. So that seems to be the concern. But I think my sense is that there will certainly be some middle path. I'm quite confident about that. The way they are quite receptive about various regulatory provisions. And I'm hoping for that. But nevertheless, in the worst of the situation also, we're quite comfortable.

Sir, my second question is on the other income. It has almost gone up by almost 6,000 crore in this quarter. And out of that, of course, fee definitely must have been increased because of the March quarter, 6,200 to 8,700 crores. But there is one item of miscellaneous income, which has gone up from 1,807 crores to 4,957 crores. And these two together have given the fillip of 6,000 crore, almost 5,900 crore to the other income, which is added in the profit, of course. So what could be this miscellaneous income going almost by 3,100 crore higher in this quarter?

May I respond?

Yes, please.

One is the Auka recovery is included in that. In this quarter, we had much better Auka recovery, which is part of the misleading.

It must have been always.

No, no, no. This quarter, we have done 1000 more than last quarter.

But included even in the previous quarter.

That is the major thing. But other than that, we have also got dividend from our and also the CMP commission. The dividend from the subsidiaries and the CMP commission. And also some annual maintenance charges, which are normally the highest in the last quarter. These are the four elements.

Sir, in this one item is the profit from the investment is also there, which is 3,463 crore. So going forward, where do we stand, sir, as far as the profit in the other income booking from the sale of the investments and revaluation of the investments, sir?

No, I think going forward with the revised guidelines, I think earlier what was required to be done for the MTM, whatever was kept in the AFS, everything was subject to MTM, will not have that kind of a situation. And also whatever profit will be there, it will also be routed through the balance sheet, not through the profit and loss also. Anything you want to add, please?

I think with the revised valuation norms, the MTM gains and losses will not be there much. But our effort would be that now how do we get the trading gains, both on the fixed income portfolio as well as equity portfolio. So that will continue. But as far as the MTM fluctuations, that I think will not be there.

Sir, the last in this round is point note number 17. Loan transfer, 24 accounts are transferred, the NPA accounts. Outstanding of 7,451 crore. Sir, is it NRCL? Because the recovery seems to be around 15-17%, only 383. That is NRCL. It's NRCL, the entire amount.

Thank you. Second question. Out of 24 accounts.

Thank you.

Before we move to the second question, we will just request you to kindly mention your name and company before asking the questions. Hello.

Hello. Sir, this is Manish Oztwal from Nirmal Bank Securities. Excellent performance, another quarter for State Bank and best performing bank in India right now.

Thank you.

On all the parameters.

Thank you very much.

So my question for the next year, your commentary says that we are anticipating 6.8% GDP growth for the next year. Where do you see the credit growth for the system and where we are at State Bank?

For us, my estimation is that we should be growing, as far as the loan book is concerned, should be growing at about 13% to 15%.

The second question on the capital consumption this year, excellent capital consumption management we have achieved. And I recall during one of the quarterly panelist meet, you said, We will grow profit, use the profit to improve the capital and then raising the funds and deliver on that front. So now, if we maintain the 13 to 15% kind of loan growth, then we should not go for big capital raise. How should one think of your capital raise plan?

See, as of now, we have done, we always keep on doing the estimation in terms of what is the ability of our capital. capital to support the growth so we have done that estimation and according to that estimation we can easily grow about 7 trillion worth of loan book today we stand at about 37 trillion as a loan book so which actually translates to about 21 percent kind of a growth and my estimation is that we should be growing as far as the loan book is concerned around 15 percent so as of now we are in a comfortable position and we are quite uh hopeful about the other options which are available through the tier one sector also. So that also will be. But as I have mentioned in the past, also, we are quite mindful in terms of our cost of capital, which actually works out to be about 14 to 15 percent. And if at all we go for raising our tier one, we are somewhere around 8, 8.2, 8.5. But net of tax, actually, it is about 5.6 only. So that is something which we have in mind. But yes, of course, we keep on evaluating the situation. If at all, there will be ripe situation. Maybe we'll look into it. But nevertheless, as of now, I feel that we are quite comfortable. But nevertheless, we'll be evaluating the situation on an ongoing basis.

And lastly, on the SBI wealth, what are the things we are doing? What is the AUM under management and that business? Because that is a very strong cross-faculty we can build over long term. Can you share some details over there?

Sure. SBI wealth, we are in the process of revamping. And now we have identified two segments. One is a premier banking. The other is wealth banking. And also, when it comes to beyond a particular TRV, we are offering the physical relationship manager. Otherwise, we are offering the virtual relationship manager concept. And as far as the AUM is concerned, there are opportunities which we are offering the wealth readiness to those who are already banking with us. So our focus is essentially new to readiness. If at all we can get the customers who are new to readiness. And earlier we were having the profile, age profile of the wealth customer was good in terms of more than six years. Now we have very clearly indicated that we want to have the younger lot like you. One of you can come to our fold in the wealth and we offer comprehensive services to all of you also. So that we should have your mind also when it comes to wealth. That is something which you are working on. We have already launched the pilot in two circles, which is one is Bangalore and the other one is in Bombay. The results are quite encouraging. And I would say that maybe another quarter or so, we should be in a position to roll out full scale across the country. And when we are going across the country, we are not only confining ourselves to metro urban areas, We are going to tier 3, 4, wherever there is a potential. Since we have got a branch network already there, we have to only be for power resources in such locations. And we are going to have a new head also for the wealth banking, who is quite well-adapted into this kind of space. And we are quite hopeful that we should be in a position to have an AUM of almost 1 trillion through the wealth itself in a year or so.

And today market has recognized your consistent predictable earnings despite of the fall in the market. All the best for the coming quarter.

Thank you very much. I appreciate it.

We'll move to the next question now.

Congratulations, sir. My first question is on the wage provision. You have explained, you know, what the run rate will be. Could you share the absolute amount? Because in this year, there are I mean, at least in this quarter, there are some right backs also. And there is an additional provision. So what will be the run rate? monthly or quarterly in employee expenses?

Going forward, we expect that we will have almost about 500 crores a month, which means about 6,000 crores would be the additional cost. Though we have already, in the previous year, as far as the wage is concerned, we had provided about 13,000 crores plus. So we will not be required to provide, I mean, it will certainly come down. And actual costs will go up only to the extent of about 6,000 crores. So about 7,000 crores savings would be there in the wages.

Got it, sir. So and my next question is on your strategic stakes in companies, not your subsidiaries. So would there be any divestments in FY25 and would that help in your growth capital or you would still want to consider an equity raise if growth is stronger?

I think these are all moving parts. We have to wait and watch depending upon how the market situation is. And based upon that, we'll be taking the appropriate call. But yes, of course, as I mentioned, we keep on revisiting our capital situation. And I've already stated in the past also, capital will never be a constraint for the growth of this bank. And we'll ensure that in good time, we have adequate capital. I'll once again repeat that. That is a confidence connection which we have. And we will stick to that.

Got it, sir. Sir, and I have one last question on margins. So what would be your outlook on margins? Right, as in that assuming rates are not cut, obviously there's a rate cut and that'll have, but assuming that rates are not cut, what will be the outlook on margins from here on?

See, we have, as far as our cost of deposits are concerned, we have already plateaued somewhere in the month of October, December only. So I think my sense is that we don't expect the NIM should undergo significant change. If you really look at it, our NIM has actually moved up from 3.41 to 3.43 from December to March. And essentially, when it comes to our international work also, it has almost more or less at the same level, some marginal 5-6 basis point differences there. So I think our effort and endeavor would be to maintain NIMS around this level only.

Thank you, sir.

Thank you.

Excellent Q4 numbers. In spite of challenges, RBI circulars, staff cost revisions, it's really wonderful. Hats off to you. Now, very few specific questions. Now, one is what are SBIs and your plans and subsidiaries plan for GiveCity? And very specifically, everybody is looking forward to it, and SBI should take the lead in this, specifically if you can articulate. Number two is very clearly, what is the growth capital required by SBI for next three years? Any estimates for that? and how we are going to raise it, and if we are doing QIP definitely at how much premium, because currently our share apparently is very much undervalued considering the excellent results and the excellent outlook. Number three, on divestment. Very clearly, say yes to Yes Bank. Very, very priced position. And there are talks, you should not go as per SEBI formula because the way IDBI pricing is there, it is three times of what happened two years back. If you do it a kind of an open auction for all stakes, you may even get two to three times of value. Because it's a very excellent technology bank, and our ex-CFO has set all the screws right, in spite of what happened in the past. If you can articulate your views on this. Next is on Indias. We were always saying, Mr. our ex-SBI CFO, who went to Jio now, had clearly articulated, we have no worries on that, we are fully prepared. And you had also quietly shared it when the stocks got a battering. What is the thought process on that on consultation with the regulators? And specifically, do you expect it post elections or it will take a long time because it's an overhang which market has forgotten for a few days? And also your thought process, how you are engaging with RBI on lots of circulars are there. It's creating a lot of uncertainty. Will it also become like NDS? Nobody really knows. But the market has taken it wrongly in the last few days. Your specific answers, I can come back on it.

Your first question is relating to the gift city and whatever our plans in the gift city. We have got a international banking unit in gift city, which we opened in the year 2016-17. And we already have built a balance sheet of 7 million over there, which is actually our own outfit, State Bank of India's outfit. And actually, it is the largest IBU also. That is one. Secondly, as far as the group companies are concerned, our SBI mutual fund has already opened a branch office, which in due course is likely to be upgraded to a subsidiary of the company, which will be based out of Gift City. So that is the other company which is going there in Gift City. And as far as other companies are concerned, Life and our custodial company, etc., They are evaluating the options and the appropriate decisions will be taken by the board of all these companies. Your second question was, please kindly repeat the question. Growth capital. We have got, I mentioned earlier also, as far as the growth capital is concerned, we are very well placed as far as our capital adequacy ratio is concerned at 14.28%. We have got ample room for raising 81 and we are hoping some kind of a revisit to the pricing formula for 81. Valuation formula, not the pricing formula, but the valuation formula. Once that kind of a clarity is in place, we will be in a position to raise 81 also. Our ROE is growing at about 20% and our loan book is growing at about 15%. So that gives us a natural advantage in terms of our ability to plow back. And that will continue to be the focus. So if at all I have to prioritize, the first is the natural clawback which will happen. Second, we will raise through 81. Third, we will look at the opportunities for raising equity at a right price, if at all required. Because as of now, with the current capital also, with the current capital adequacy ratio, we can grow the balance sheet to 7 trillion by another 7 trillion. Our balance sheet is already 37 trillion, and that 7 trillion actually translates into about 21%. So I think I have assured multiple times, and I once again would like to reiterate, growth capital will never be a constraint for the growth of this bank and the group companies. I assure you once again on that. Your third question was relating to? Yes, Bank. Yes, Bank, I'm unable to comment anything as of now because, but what you mentioned, we will certainly keep in mind. When we go to the board, we'll keep your suggestions in mind and we will take appropriate decisions. I will only say this much. Fourth question. India's. India's. India's ECL kind of a thing which you are mentioning. At a point of time, we had made an assessment for the ECL. The provision requirement was about 30,000 odd crore, which was required to be deferred in about five years' time. which works out to be about 6,000 crore a year. With a balance sheet profit of about 60,000 crore, this does not really worry us at all. But I must also mention that then and now, our quality of book has even improved. So my assessment is that even ECL requirement will also come down. It is simply back of envelope calculation. We have not applied ourselves on this. But nevertheless, since it is not a cause of worry, I'm not really much concerned. Last question was relating to the recent circular instruction. No, in fact, before that you had said that how are we engaging with RBI on various circular instruction. Let me assure you, RBI as a regulator is very receptive regulator. And since we deal with many other regulators also, I get a chance to say this. But they are very cognizant in terms of what the requirement of the economy are. But at the same time, they want to ensure that the banking system should stay stable very well protected. So with that in mind, perhaps this kind of a discussion paper has been brought out and I'm quite sure that they are very keen to look at the suggestions which will be given by IB as well as by us as the State Bank of India and maybe they will even be open to the viewpoint of the various other stakeholders also. The reason why perhaps this kind of a circular instruction has come because in the market we have seen That 15 years project loans, 15 years infrastructure loans are being priced linked to the T-bill. I think any regulator will get worried on this. So I think I actually look at it from that perspective. So that is the reason and more so this has to be seen in the context when interest rates are expected to start moving up. Maybe 6 months, 9 months, whenever. But there could be a possibility. So when the risk is not properly priced, I think regulator is bound to be concerned. And my experience, my thought about RBI is a very balanced and very mature regulator. So we are very respectful for our regulator. Thank you.

Thank you for a very good reply. On the group companies, very specifically, on the group companies, group companies are AMC. Nippon price market cap has gone up three times in the last three years. HDFC, AMC, three times. It's high time we should get it listed and get valuation for that. This is the right time. Same thing for insurance. Now I'll come to our SBI cards. Why it is underperforming? I feel it will continue to underperform for the next five years also. Why? I had engaged with Deputy MD cards. Now, We have a prime reputation pre-paying car loans, pre-paying home loans, and ICICI, we can keep one crore FD for a lifetime card, but SBI card, they are insisting on compulsory FD. Just because we want to use SBI card for buying on Amazon and Flipkart, today I lost a Rs. 2,000 discount because SBI is insisting on a FD deposit of Rs. 30,000-40,000, but ICICI gives me a lifetime free card where I can play golf. So I don't, why insist on a 30,000, 50,000 FD rupees when ICICI voluntarily we can give one core FD and this is a, your Turner Road branch is not listening to your deputy MD. He says, refer to me, and it needs to improve. That is why it is underperforming, and other cards companies will flourish. If you can take this seriously and take it up, this will help our companies and the bank in a big way.

We have taken note of your suggestion, but only one thing which I would like to mention. I am very conscious of what you mentioned in terms of the valuation for Nippon Life, HDFC Life. And also I am conscious of the challenges being faced by some of these companies on account of getting listed. I think the example of ICICI securities is before all of us. They listed and they delisted themselves also. So it's a matter of principle, essentially, because when it comes to entities like mutual fund, et cetera, they're more like a knowledge industry. The knowledge capital is required, not the financial capital. And in fact, for that matter, considering the capital which we have put in there and their net worth, it is significantly high. And I don't want to expose them to say quarter-tuck, QSQT, because if at all I will list them, they will only keep on answering to all of you and will not focus on the product. I don't want to do that. Let them focus on the product and generate return for each one of you. Thank you.

All the best.

Team SBI, congratulations on excellent performance. Sir, we are moving globally in the right way. Globalization on money market, debt market. I think next 12 months, there's going to be huge inflow where India markets are concerned. And size of SBI may have a larger share to gain off, whether it's our debt portfolio, FX, maybe pricing products as well. How are we placed to garner that profit?

Well, when it comes to the opportunities which are being unfolded on account of the debt paper getting included into JP Morgan and also Bloomberg also. So we have already activated our custodial company, which is SBSG Global Securities. And also when it comes to holding a stock of debt paper, Some of our entities which are in place, like SBI DFHI being one, which is a PD, which can actually warehouse all these kind of debt papers also. That is one entity which can hold such paper. Apart from that, our treasury also are holding such papers. So I think we are very well placed in terms of reaping the benefit of the out of the opportunity, which will unfold before us. Yes, as of now, these are the early days. There is some kind of volatility and that volatility is going to be the way forward for such instruments, too, because the way I read it is. if at all there is a global scenario where the interest rates in US will go up, it will lead to movement in and out. That also is a reality. So I think economy per se will have to really gear up for such kind of volatilities. But nevertheless, as a major lender and also a custodian of all the securities, we have multiple entities where we can warehouse and we can keep stock of it. Once we'll have a visibility of the trend, we will certainly be on the top of the opportunity. I only assure you this.

Sir, the kind of profits we are generating and the strength of human resource which HBI churns out not only for themselves, for the industry, and with new generation capabilities which are emerging in the global banking, what are we enabling ourselves at in understanding adoption of technology and human resource and what kind of capex we will do to invest in this?

I think more important is to leverage the analytics, which gives us enough insight into the customer behavior. And based upon that, if at all, we can offer hyper-personalization and the customization, which suits the customer's requirement. And it is not merely in terms of product and the product features, but it is also in terms of the distribution channel. And knowing all this kind of a trend, we are ensuring that we invest well in terms of the people, product, process and technology. It is not merely within the company, but it is across the group. So that is the broad principle on which we are operating. And we'll ensure that we must not let any opportunity go past us.

Thank you for answering all my questions. Thank you.

All the best. Hi, sir. This is Jay Mundra from ICICI Securities. A few questions, sir. Sir, last quarter we had said that staff cost for next year, FI25, should be around 65,000 crore. And we had deduced that fourth quarter could see around 22,000 crore rough amount. This quarter the staff cost has been reasonably lower. There are some adjustments that we have done. So does the 65,000 crore number for F525, does that still hold or it could be revised upwards?

It would be somewhere around that only. We expect that 65 to 70 is something which we expect, but that is only to take care of what we have not visualized. But otherwise, our additional cost is only about 500 crore, as I mentioned, about 6,000 crore per year. So in this one, if you can go back to the previous slide, And this one also, go back to the previous slide, please. Yeah, this one also 71,000 crore. If you really look at it, herein we have got additional provision of 13,387. So if at all 57,850 plus 6,000 crore would be about 63,000 crore. So what we mentioned about 65,000, 66,000 crore is a reasonable estimation because there would be DA increase, et cetera, which we cannot really visualize as of now. So that's a reasonable estimation.

Sure. And second question is, sir, on your corporate growth, right? So this year and this quarter, we have ended at 16% YOY. There is a seasonal uptick also in fourth quarter. But going ahead for maybe in one year and two year, do you think that this 16% has scope to move upward to around, let's say, 20%? Maybe driven by, you know, whatever the CAPEX demand, fresh demand. And do you see any change in the competitive intensity because it looks like some of the large private banks may not prioritize corporate growth at this point of time?

Well, as far as the growth is concerned, the loan growth in particular for a bank like State Bank of India, we always link it up with the GDP growth. GDP growth, nominal growth plus inflation plus 2%. That's our principle. And with that in mind, I expect that we should be in a position to grow about 15%. 13% to 15% is my estimation. And we actually get to have opportunities since we are present in all sub-segments. We have enough opportunities everywhere. But we are very mindful in terms of deciding our portfolio so that we should be in a position to improve our e-loan advances for the portfolio as a whole. So that is something which we have in mind. Corporate, we should be in a position to grow around 16%. I think overall we should be in a position to grow somewhere around 13 to 15%.

Any comment on the competitive intensity?

Competitive intensity, of course, will give us an opportunity for improving our yield. But I think when it comes to corporate book, private sector banks are there, but the significant partners are also the public sector banks. So, I think, but nevertheless, we have invested well in terms of our capability, in terms of processing. We have a PFSBU, which is a strategic business unit, and we have invested very well in terms of building the capability. And, you know, the newer opportunities which are coming, particularly when it comes to EV batteries, and also when it comes to cell manufacturing. So, all these are involving some kind of a project evaluation, comprehensive project evaluation. And if at all we look at our goal eventually to become a part of the global supply chain when it comes to white goods, when it comes to engineering, when it comes to telephone, telecom manufacturing, etc., etc., they are going to unfold significant opportunities for these kind of investments. So I think we have invested well and that gives us a competitive advantage as compared to others. There could be situations that we will underwrite and then downsell also. But yes, of course, that will generate fee income for us. And we are quite conscious on this particular opportunity and we want to leverage it to the hilt.

So lastly, we have improved CD ratio this quarter. We have been doing this for the last few quarters. But what is your sense, you know, where can it stabilize? There seems to be some more scope, but what do you think would be the idea? Ideally speaking, for a bank of our size, we would like it to be somewhere around 75%. This is domestic or? Domestic.

Thank you, sir. Thank you.

Hello, sir. This is Akshay from Autonomous Research. Yes. So I have two questions. One on the credit cost front. So our credit cost has been in the range of around 20-25 basis points for some time now, which is aiding our ROA, which is above 1%. So now with quantum of recoveries moderating, how do we see credit cost evolving?

I think, of course, what you mentioned in terms of recovery moderating, but nevertheless, if at all, we are required to have lower provisions also, even that will also help us. And that is something... which is our effort and endeavor. And see, in this bank, you know, for such a big bank, we have a very simple mantra when it comes to credit quality. And that mantra is known to everybody in the bank, that their NPA and SMEs should be lower than that of the 31st of March of the previous year. So on the one hand, our loan book keeps on growing. At the same time, our NPA and SMAs are kept under check, which is all effort elastic. So to make it really happen, everybody is energized to achieve this goal. And that is something which is reflected in these numbers also.

Any specific guidance you'd like to give on the credit cards?

I would like to keep it as low as possible. My effort would be to bring it to 0.25, but we cannot ignore the risks which are inherent in the macro.

We'll have to live with that. Your guidance has been 50 web, sir.

Guidance, of course, is 50, but that is for all of you. When it comes to my internal stuff, it is as low as possible. Because you people hold me responsible for whatever guidance I will give you. I don't want to get, I should not be held responsible for that. But just let me assure you, this is effort and endeavor is to do it, to maintain the asset quality as best as possible.

Second question is on the other income front. So other interest income front. So there seems to be a component of IT interest.

Yeah.

Yes.

We keep on paying to them also and we have to have the refunds also. So it's a part of the game. But nothing unusual. Yeah.

Hi, sir. This is Saurabh from J.P. Morgan. Two questions. One is on your CASA growth. Your current account growth is just 2% this year. So when your CASA is so, I mean, much lower than, let's say, even the private banks, how would you think about your margins for next year? So besides the CD ratio, is there any other flex you have on your NIMS? And the second is on the overhead growth. So you've quantified the staff. How would you think about the overhead growth when your loans are growing at about 14-odd percent? Is there any operating leverage there? And just one related question is essentially around the credit cost piece. Your agri-NPLs have now come down to 9.5%. Do you think this can fall or do you think this stabilizes around 10%? Thank you.

The first one is relating to the CASA. Well, CASA is something which the industry as a whole has seen tumble. And I think as compared to others, we have lost the CASA to the extent of over 280 basis point. This is generally a phenomena seen when the people are looking for the better yielding asset class. And here also you will see when it comes to our term deposit growth, it is as high as 16%. So that's part of the product feature when we are opening high value savings bank account. We need to offer them the multi-option deposit scheme. which is actually a sweep beyond a threshold. So that is something which is seen. So whatever you are seeing in term deposit is essentially also originating. Part of it is coming from the savings bank also. The important component here is the current account. And current account post the revised business model adoption by the government of India, where just-in-time has become a reality. We had reoriented ourselves into the trade commerce industry for opening of current account and we had a decent success. We already opened it at more than 40 locations across the country which are the major markets for current account and for such kind of a business. Well, this is the position as at the end of the day. But what we keep on monitoring on an ongoing basis is the daily average balance in the current accounts. And there we get to see decent growth in the daily average balances. Apart from that, we are into CMP. We are significantly invested into the technology so that we should offer the best in class, the cash management product. So these are the kind of initiatives which we have already taken. And I'm sure with these initiatives, We were positioned to improve our CASA. Your second question was relating to Agri-NPA of course. Agri-NPA, we have brought it down from 15 to 9 and our goal is to, in fact the target which I have already given is to bring it to less than 8. And we are quite hopeful that we should be in a position to achieve it, bring it down somewhere in the range of 6 to 8 percent in the days to come. So that is our effort. And we are quite hopeful to achieve these numbers also. Overhead.

Yeah. Use the mic, please.

Growth in overheads, basically, for next year.

Basically, the staff cost.

Sorry?

Staff cost is the major expense for overheads.

No, in fact, in the growth in the overhead, we have got some. There's a business and developmental expenses of Rs. 1,200 crore. PSLC is the other one. When we are actually building on our AGRI book, We hope that we should be in a position to reduce our dependence on the PSLC. So that will help us in reducing this kind of increase in overhead too.

Can it grow slower than loans or no next year?

Yeah, I think yes. I think yes, we can. Because as I mentioned that, you know, our effort when we are embarking upon SBOS is essentially to build up excellent agree book and which should help us in reducing our dependence on PSLC. That is our effort. We have seen it as compared to past. We have already seen an improvement in this.

Hi, sir. We'll have one last question now.

Yeah, please. Param from Nomura here. Yeah, please. Sir, firstly on your provisions. So this year we have seen about 4,000 crore of provision write-backs from standard provisions and other provisions that are showing up. Is this something that can continue going ahead because your restructured coverage on your restructured portfolio is pretty high? So is that something you can keep reversing going ahead? That's my first question.

37.

Can I respond, sir?

Yeah. You start, I will chip in. Yeah.

One reversal that we got was the NPO automation that has been done by the bank and RBI asked us to provide 0.5% of the operating income. I think we have reversed how much?

1,000 crores, about 900 odd crores.

That is different. During the quarter we have reversed 900 crores. That is a major reversal. And then in standard accounts, two of the accounts have remained standard for the last two years. So we have just written that back. That's a very normal thing to do. Other than that, there is no one of... 1,306 crore is one item.

The other one is 370 crores. So other provision is 1,306 crore, what she has mentioned about 900 crore. We were required to keep extra provision, which we have reversed. And standard set is what is explained.

Sir, you also have a very high PCR coverage on your restructured book, which the other banks don't have. Is that something you look to reverse?

We don't envisage any challenge on that. But nevertheless, since we already provided for it, as a matter of abundant caution, we have kept it. But otherwise, the behavior of the restructured loans is actually much better than what we had expected. And the kind of repayment which you are seeing is pretty decent. And I don't think so we'll be in need of utilizing that provision. Apart from that, That is one pocket which you have mentioned. There are many others also. So one more question.

So on the corporate book, this time quarter on quarter, we have seen a very strong growth and we've not seen it in the large private banks. Of course, you don't have any.

No, they are not really into this activity. They are shying away from this activity.

So is there any inorganic component to it? Sorry? Is there any inorganic component as in?

No, no, no, no. We don't do that. We believe in underwriting and downselling. Others would have the inorganic. We don't have. We want to build the fee income portfolio. Perfect. Thank you so much.

Congratulations. Thank you. Sir, we have a few questions coming in through the online webcast. Yes, sure.

The first one has come from Mr. Ravi Kiran Lingamani. How SBA is expanding its services for NRI? As we can see, NRI are looking towards private banks for savings. We have got exclusive NRI branches and also a completely digital paperless journey is being extended to onboard the NRI customers through a new application. Accounts can be created in as little as 30 minutes with the help of this new journey. And also apart from that, we have got the centers which we have created only for facilitating opening of the NRI accounts at two locations in the country. That is also helping us in ensuring that we have got the excellent service which we can offer. In certain geographies where the regulators permit us to offer NRI services, we are also putting in place our feet on street so that we can garner this NRI deposits also and create value also. for our valued NRI constituent. The next question is coming from Amol. And is SBI plan about listing of SBI Journal? As I have already mentioned that we would like this company to grow a little more. Then we will think in terms of its listing. Next question is coming from Chintan Joshi, Autonomous Research, London. Can you explain 29% quarter-on-quarter increase in other net interest income? Are there any one-offs in this number? There are no one-offs on this number. It is business as usual. Income from interest on IT refund is 1302 crore in quarter 4 as compared to 740 crore in the quarter 3 of financial year 24, which is actually, it keeps on happening. Another question is coming from Komal Jain. Your comments on the future outlook? We are expecting a very good business growth in the next couple of years, subject to favorable macroeconomic conditions and easing of the geopolitical tensions. We are also focusing on improving our market share, both in deposits and advances. The main driver of business growth will be expansion of digital products and services on our digital omnichannel platform, Yono. To increase efficiencies in the bank, we will continue to focus on booking quality assets and improving asset quality going forward. Here, it would not be out of place to mention that this year we have seen more than 30% growth in our book, which we have underwritten with the help of UNO. We expect this trend to even get further strengthened in the days to come with the new offerings which we are going to have. Next question is from Priyash Jain from HSBC. What percentage of the loan mix is fixed rate, MCLR link, repo link, and others? So MCLR link as of now is 36%, 37%, EBLR is 27%, fixed rate is 21%. And others are just over 14%. They would be majorly... kind of loans. And next question is coming from Ankit Pandey. What is the impact on us of the RBA's draft guideline on infrastructure project finance? It's a draft guideline, as I've already explained. I'm sure this question is already answered for you. Next question comes from Rahul K. What is the growth guidance on advances for the next two years? What is the quantum of technical return of accounts held and recovery run rate? As for long-term plans, we expect the growth to be somewhere in the range of 13% to 15%. Outstanding technical write-off is 1,75,202, which is actually occur book, which we call it. And recovery from the return of account is 6,934 crores. Another question is from D. Siddharth. Going forward, will SPI outpace the deposit growth of banking industry? Will UNO 2.0 take care of all kinds of demands of Kasa depositors? We have taken several steps to increase our market share in deposits. Digitization, mainly UNO, will definitely help in our endeavor to garner more and more quality deposit and much lower cost also. So these are the questions which we got offline. Any other questions anybody has got would be happy to answer. Thank you, sir.

This is Piran, engineer from CLSA. So just firstly, following up on his question, will we grow faster in corporate book next year versus the 13 to 15% target? Just given that HDFC will be slower.

Whether HDFC was a challenge for us in the corporate book, I really don't know. So if they are growing slow, will that give an opportunity? Perhaps that is not the consideration. What matters most is how the macroeconomy evolves. So if at all there are opportunities in the macroeconomy, I assure you we will go strong.

And so just secondly, our fee income, if I look at it over a five-year period, growth has been like 4-5% versus balance sheet growth of 11-12%. What exactly has led to this and can we expect it to grow in line with loans?

I'll have to come back to analyst meet every quarter and answer to all of you. That has led to this growth. Because I keep on chasing all of my employees. That they should go for the loan application fee. I'm not giving any waivers. Simple.

It's a more competitive dynamic.

See, if at all you can create value, people don't mind paying fee. That's what I believe. And we believe in creating value. We believe in financial closures and helping our corporates to go fast for whatever they intend to and then we do the downselling. This is as a business policy we have decided.

Thank you. Yeah, this is Mahesh from Kotak. Just two data keeping questions. One is on the balance sheet, there was a DTA impact on the reserves. Can you explain what is the math behind that? Sorry? The net worth, if you look at the movement of net worth, this quarter, it doesn't add up with the earnings that has been reported. We understand that you have taken a charge at the DTA level. If you could just explain what's happened this quarter. I think I have not understood it well, so we'll answer it.

Separately, I'll get back to you.

In last quarter, you had indicated that there would be a positive impact on the investment portfolio. Has that been completed at the beginning of this quarter?

Yeah, it's all right.

Yeah, we have taken the valuation, revised valuation, and has been implemented from 1st April. And as we mentioned, I think our initial estimate shows that there's a positive impact on the AFS reserve. As you know, the positive gains have to be reflected in the AFS reserve only.

And is it possible to quantify that or we'll have to wait?

No, we'll have to wait for the quarter to end it because this is, I mean, we need to look at how the portfolio behaves by the end of the quarter.

Perfect. Last question, ma'am. On the staff expenses, it was expected that there would be an incremental hit of about 5,000 crores this quarter. It has not happened. If you could just give us an explanation.

Actually, when the agreement happened, we could have a very clear visibility in terms of what to pay and how much to pay. So it had impact in terms of what is the pay slip component, what is the basic pay, etc., etc., Based upon that, it was all reassessed, and whatever additional provisions were required, they have been booked. And we also had some MTM gain in our credit. MTM gain on our corpus for the pension and the pardon fund also. So that has also helped us in this quarter.

And also the lower liability on gratuity. So we have done some reversals on that because we have already... We have divided for more in the gratuity also.

That's why we have reversed around 812.

So as against our estimate of 5,400, we have now done 669 only. And that takes care of the entire thing.

Perfect.

Thank you.

Good evening, sir.

This is Usmal from Goldman Sachs. I have two quick questions for you. One is on upgrades and recoveries. I want to understand what are your thoughts on how it would trend in the next year. Should the 13% upgrades to opening GNPL be the base case or do you see any lumpy accounts coming in next year that could push it forward? And the second question is on the deposit growth. As of FY24, your deposit growth year-on-year looks like 11%, which is slightly lower than what we saw for the industry. So how do you see that trending for the next year?

See, when it comes to the recovery, I would say that no lumpy accounts left out. They're all small and sundry accounts which are left out. And the recovery, but happy to share with you that even in this year also, we had a similar situation. And still we could make the recovery as high as about 7,000 odd crores. So 7,000 odd crores as compared to 6,900 as compared to about 7,000 crores which we did last year. So I think, you know, depending upon the stock of such assets, we need to recalibrate our strategies. So that is something which we will be doing. Your second question relating to deposit growth. Deposit growth, we have taken multiple initiatives and with the sharp focus with our complete retail network and also focus on our corporate books also, corporate relationship also. I'm quite hopeful that we should be in a position to improve our percentage growth in the year to come. Thank you. Thank you very much.

Thank you. I trust all the questions have now been addressed. We'll be happy to respond to other questions in offline mode. Let me end the evening with thanking the Chairman Sir, the top management team, the analysts, the ladies and gentlemen. We thank you all for taking time out of your schedule and joining us for this event. So to round off this evening, we request you all present here to join us for high tea just outside the hall. Thank you. Thank you. Thank you very much and have a great evening. Thank you.