State Bank of India

Good evening, ladies and gentlemen. I am Pawan Kumar, General Manager, Performance Planning and Review Department of the Bank. On behalf of the State Bank of India, I'm delighted to welcome the analysts, investors, colleagues, and everyone present here today on the occasion of the declaration of the quarter two financial year 25 results of the bank. I also extend a warm welcome to all the people who are assessing the event through our live webcast. We have with us on the stage our Chairman, Sri C.S. Sethi at the center, our Managing Director, Corporate Banking and Subsidiaries, Sri Ashwini Kumar Tiwari, our Managing Director, Retail, Business and Operations, Sri Vinay M. Tonse, Our Managing Director Risk Compliance and Saji, Rana Ashutosh Kumar Singh. Our Deputy Managing Director Finance, Srimati Saloninarayan. Our Deputy Managing Directors heading various verticals and Managing Directors of the subsidiaries are seated in front rows of this hall. We are also joined by Chief General Managers of different verticals business groups. To carry forward the proceedings, I request our chairman, sir, to give a brief summary of the bank's quarter two financial year 25 performance and the strategic initiatives undertaken. We shall thereafter straight away go to question and answer session. However, before I hand over to the chairman, sir, I would like to read out the safe hour 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 Sir to make his opening remarks. Chairman Sir, please.

Thank you. Good evening, ladies and gentlemen. Thank you for taking the time to join this hand list made today post-announcement of Q2FI 25 results of the bank. The results for the second quarter of FY25 highlight continuity, consistency, and SBI's significant long-term strengths. At the outset, I would like to thank all our stakeholders for their support and helping us in creating a sustainable value not only for the bank, but also for the economy as a whole. Over the years, SBI has remained focused on strengthening the key components that contribute to this sustainable value. We have prioritized our liability franchise, refined our processes, continued to improve our underwriting standards and aimed to deliver value to all stakeholders, while positioning ourselves as a reliable financial services brand. I will first start with a brief description of the present global and domestic economic scenario and then discuss banks' performance. Global growth is expected to remain stable, though somewhat underwhelming, with cementing of growth in the largest economy of the US being a silver line. The recent US election results could lead to lower taxes, favorable regulations, along with tighter labor markets. They also present an opportunity for the Indian economy to further strengthen the domestic manufacturing base while closely aligning with strategic allies. Further, any positive development on the geopolitical situation in areas of conflict could lead to easing of commodity prices. On the other hand, the EU block appears still shrouded in uncertainties. The global growth forecast by IMF for 2025 remains at 3.2%, with India remaining the fastest growing large economy. In the domestic front, India's GDP registered a growth of 6.7% in Q1, driven by private consumption and investment. Looking ahead, agriculture sector is expected to perform well on the back of above normal rainfall and robust reservoir levels, while manufacturing and services activities remain steady. On the demand side, healthy curry sowing coupled with sustained momentum and consumer spending in the festival season augur wealth for private consumption. The average inflation for FI25 is expected to be 4.5% according to RBI estimates. Latest numbers show that scheduled commercial banks deposit growth has now surpassed credit growth. Deposit credit differential has now turned positive, which was last seen in April 2022. We expect SEB's deposits will grow 11% to 12% and credit buy 12% to 13% in FI25. RBI has ensured that system liquidity remains comfortable by conducting two-way market operations. Coming to the bank's performance, we have once again delivered a good set of numbers. At the end of Q2, FY25, our credit growth was 14.93% year-on-year. Deposit growth was 9.13% year-on-year, while the CD ratio domestic was 67.87%. Importantly, our slippage ratio was 0.51%, with the retail slippage ratio at 0.31%. Credit cost was 0.38% and the PCR was 75.66%. The profit for the quarter was 18,331 crores, up almost 28% year on year. On the business front, deposits at the end of Q2, FY25, deposits have crossed a milestone of 50 trillion rupees with more than 50 crore customers. We are humbled to serve one out of every three Indians. In some way, SBI touches every Indian family. The total deposits have grown by 9.13% year on year to 51.17 trillion. Terms deposits have grown by 12.51% year on year. Our current account deposits have grown by 10% year on year and CASA has grown by 4.24%. We have maintained CASA ratio at more than 40%. As far as credit growth is concerned, I am pleased to advise that the credit growth continues to be robust across all segments. Our domestic advances have grown by 15.55% year-on-year, driven by 18% growth in corporate, 17% in agri, 17% SME, and 12% in retail segments. Our foreign office advances have grown by 11.56% year-on-year. Our market share in savings bank deposit was 26.51% at the end of June 2024. From September 2019 to September 2024, our savings franchise achieved a compounded annual growth rate of 8.34%. When it comes to advances, our market share was 19% at the end of September 2024, with a five-year CS year of 11.76%. Notably, our credit growth in Q2 was 14.93% as compared to 13.03% for the ASCBs. As far as asset quality is concerned, slippage ratio in Q2 FI25 was, as I mentioned earlier, 0.51%, and the credit cost stood at 0.38%. The net NPA ratio improved by 11 basis point year-on-year and stands at 0.53%. We have a well-provided NPA book with PCR at 75.66%. I think the first time we crossed 75% cover. These indicators of asset quality highlight the robust quality of our loan portfolio. Our liquidity position is comfortable with the liquidity coverage ratio being about 129% as on 30 September. And the domestic CD ratio was at 67%, 67.87%, indicating significant potential to grow our credit portfolio. The bank remains well capitalized, and we have sufficient headroom to take care of business growth requirements. Our capital adequacy ratio is at 13.76% without considering blowback of profits and is well above the regulator requirement. If we include the profits for H1FI25, our CIR would be at 14.79%. I am happy to share the progress we are making in digital banking. More than 8 crore customers have been registered on Yono, driving digital agenda of the bank. 61% of our regular savings bank accounts are opened through Yono in Q2-FI25. Our subsidies are also consistently performing well and continue to create significant value for all the stakeholders. We will continue to nurture these subsidiaries and maintain leadership position in the respective businesses. We are glad to report that the bank continues to report ROEA and ROE greater than 1% and 20% respectively at the end of half year, FY25. Previously, we have highlighted that SBI stands out as one of the few financial institutions with unparalleled long-term advantages capable of delivering more than 1% ROEA at this scale. Scale is a crucial aspect to consider. SBI maintains a more than 1% ROE with an advances portfolio of 39 lakh crores, an investment portfolio of 16.66 lakh crores, a deposit base of 51.17 lakh crores and a total balance sheet size of 63.41 lakh crores which is risk weighted at 54%. It is important to highlight the risk weights of SBI's balance sheet. A more insightful indicator of SBS profitability is its industry-leading ROARVA of 2.07%. This is risk-adjusted return on the risk-weighted assets. By combining our market shares in both asset and liability products with ROARVA's, it is evident that the bank has a dominant presence in all the large risk-adjusted profitable lending and liability markets in India. So while we are glad about the outcomes in Q2FI25, we are also mindful of 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 bank deposits by further strengthening our customer outreach and branch network. Although the bank's cost base is substantial, it highlights our commitment to compliance and establishment expenses. The bank's ROE profile is currently higher than its credit growth, implying CET1 accrual in the future. From this strong position, our goal is to consistently achieve an ROE of over 15% throughout business cycles. To conclude, I want to thank you all once again for your support. The bank, while pursuing its own progress, contributes to the progress and growth of the economy. We remain committed to rewarding our stakeholders' 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.

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 asking the questions. To accommodate all the questions, we request you to restrict your questions to maximum two at a time. Also kindly restrict your question to financial results only. and no question be asked about a specific account, please. In case you have additional questions, the same can be asked at the end. We now proceed with the questions and answer session.