State Bank of India

I am Pawan Kumar, General Manager, Performance Planning and Review Department of the Bank. On behalf of the State Bank of India, I am delighted to welcome the analysts, investors, colleagues, and everyone present here today on the occasion of the declaration of the financial year 25 results of the bank. I also extend a very warm welcome to all the people who are assessing the event through our live webcast. We have with us on the stage our Chairman Sir T. C. S. Sethi at the centre. Our Managing Director, Corporate Banking and Subsidiaries, Shri Ashwini Kumar Tiwari. Our Managing Director, Retail Business and Operations, Shri Vinay M. Tonse. Our Managing Director, Risk Compliance and Saji, Shri Rana Ashutosh Kumar Singh. Our Managing Director, International Banking, Global Markets and Technology, Sri Ram Mohan Rao Amara. Our Deputy Managing Director, Finance, Srimati Saluninarayan. 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 Chief General Managers of different verticals, business groups. To carry forward the proceedings, I request our Chairman Sir to give a brief summary of Bank's quarterly 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 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 variety of factors. Thank you. Now I would request Chairman sir to make his opening remarks. Chairman sir please.

Thank you. Thank you Pawan. Good evening ladies and gentlemen. Thank you for taking the time to join this analyst meet today, post-announcement of Q3 FI25 results of the bank. The results for the third quarter of FI25 highlight continuity, consistency and SBI significant long-term strengths. At the outset, I would like to thank all our stakeholders for their support and helping us in creating sustainable value, not only for the bank, but also for the economy as a whole. Over the years, SBA 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. In 2025, global economy is being driven by a strong US economy, offsetting the weak Euro area and China. As per its latest assessment, the IMF projects global growth at 3.3% both in 2025 and 2026, below the historical average of 3.7%. The global inflation has continued to soften and is expected to approach inflation targets for most of the central banks, albeit with a different speed across geographies. However, on the downside, the impact of trade wars on global growth and in turn on inflation remains uncertain at this stage. While the new US administration's tariff decision is so far confined to North America and to some extent to China, The impression of full-scale tariff across all countries has so far not materialized. At the domestic level, India's economic growth is poised to rebound as domestic demand regains strength post the budget announcement, even as global uncertainties remain. CPI inflation has also eased to a four-month low of 5.2% in December 24 and will continue to decline as per forecast. As per the latest data, bank credit grew year-on-year by 11.5% and deposits year-on-year by 10.8%. Coming to SBI, the results for the third quarter for FI25 demonstrate the bank's ability to operate profitably at scale due to our substantial long-term strengths. These advantages stem from our institutionalized framework, which is guided by structured processes and commitment to fairness for all stakeholders. The net profit for the quarter was 16,891 crores, up 84% year-on-year. At the end of Q3 of 5-25, our whole bank credit growth was 13.49% year-on-year, with the domestic credit growth at 14.06%, while the CD ratio was 68.94%. Importantly, we maintained stellar asset quality, with a slippage ratio of 0.39%, Retail personnel slip rate ratio at 0.32% and credit cost at 0.24%. PCR maintained at robust level of 74.66%. As far as business is concerned, the total deposits have grown by 9.81% year-on-year to 52.29 trillion rupees. I think this is the first time we crossed 52 trillion. And term deposits have grown by 13.47% year-on-year. Our current account deposits have grown by 14.22% year on year and CASA overall grown by 4.46% year on year and with CASA ratio at 39.2%. Importantly, the current account growth has continued to remain strong for the bank over the last two quarters despite competitive market environment. And as far as credit is concerned, I am glad to share that the growth continues to be robust across all segments With all the major segments registering double digit growth, our domestic advances have grown by 14.06%, driven by more than 18% growth in SME, 15% in agriculture, 15% in corporate and 11.6% in retail personal segments. Our foreign offices advances have grown by 10.35% year on year. The domestic credit deposit ratio was at a healthy ratio of 68.94% at the end of Q3, indicating sufficient headroom to address future growth requirements of the economy. The bank continues to demonstrate industry-leading asset quality at this scale. The surplus ratio for Q3 FY25 was 0.39%, while the credit cost, as I mentioned earlier, stood at 0.24%. The net NPA ratio improved by 11 basis points year-on-year and stands at 0.53%. We have a well-provided NPA book with a PCR of 75%. The asset quality of the bank has continued to remain strong over the last five years, which demonstrates the quality of our loan portfolio, the robustness of our underwriting processes, and the leadership of the bank across business lines. Our capital adequacy ratio is at 13.03% without considering flowback of profits and is well above the regulatory requirement. If we include the profits for nine months, our CIR would be at 14.5% while the set one ratio will be 10.99%. So based on the current profitability and growth profile of the bank, we believe we have sufficient headroom to take care of business growth requirements. As far as digital is concerned, I am glad to share the progress we have made in digital banking, which is an ongoing journey. More than 8.5 crore customers have been registered on Yono, with 64% of our regular saving bank accounts opened through Yono in Q3 of 2025. So, as far as subsidy is concerned, we are 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 advise that the bank continues to report ROA and ROE greater than 1% and 20% respectively at the end of 9 months. A key point regarding these metrics is our operation at a substantial scale. I think in the last quarter also we did mention this. We reported total assets worth 66.21 lakh crores. total advances of 40.68 lakh crores and total deposits amounting to 52.29 lakh crores. When we mention scale, it indicates the bank's extensive investments in workforce, training, procedures and compliance to maintain this level. Sustaining our growth rates implies that our bank's infrastructure and personnel are equipped to support continued growth at this magnitude. SBI continues to be the leader in all the risk-adjusted profitable lending and liability pools in India. Consequently, SBI's ROA above 1% is derived from the scalable fundamentals of banking, a stable NIM, controlled operating expenses, and maintaining credit quality. While we are happy about the outcomes in Q3 of I-25, 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 deposit 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 set one accrual in the future. From this strong position, our goal is to consistently achieve an ROE of over 15% through the business cycles. So wrapping up my initial comments, I express my gratitude for your ongoing support to the bank. As the bank advances its objectives, it also plays a role in driving the progress and economic development of the surrounding ecosystem. We are dedicated to upholding your confidence in us by delivering superior, sustainable returns over the long run. My team and I are now open to 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 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 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 question and answer section.

Sir, compliments to you for the overall performance of the bank on the many of these factors and most of it is as per the guidance given by you. We are very comfortable comparative to some of the other banks on the business growth also as well as the profitability. Having said that, I have got few basic points. Our operating profit has tremendously, I mean, has gone down substantially from 29,294 crore in the last quarter to 23,551 crore, which I believe is is mainly because of the loss on trading or revaluation of investments, this is 4000 and forex loss. Together about 4610 crore. Equally, we have tried to set off some of this reduction in the profit by lesser provision and taking advantage of the some of the buffer provision also using it here of about 1100 crore. So, going forward, now we have one more quarter left in this year, FI25. What is your view and the plans and what can you say that yes, are we going to reach, arrive at again the same kind of 29, 30,000 of operating profit? in the remaining first one quarter. Secondly, my second question is on, sir, on the, though we have done better than some of the other banks, which are much smaller than our size. I mean, our bank is going to be soon when we meet next of one lakh crore bank, business bank. So, yes, hopefully we'll see that immediately in the next quarter only. But then still, I mean, if you look at the, say, even credit figures, our growth in the nine months is only 6.73 percent. And on the credit is 7.97 percent and deposit is 6.73 percent. So that gap between the targeted numbers which are given. of whatever 14-15% growth or even moderate 14% also. Are we in a position to do it in the remaining two and a half months of the, you know, the current quarter? How are we placed on that looking at our pipeline for the sanctions which are already, I mean those which are already sanctioned and some of the proposals which are in pipeline, are we in a position to do it in the March itself, February-March to achieve the targeted numbers? This is in the first slide.

Thank you. I think two, three questions what you raised. Partly I will answer and I will ask Ashwini to supplement to me. One is 100 lakh crore business. You said 1 lakh lakh crores. I would have been happy. 100 lakh crores. No, no. I am just, in the light of when I think this bank has the potential to reach that number also as well as what you mentioned. But I think we will now restrict to 100 lakh crores. I think we eminently poised to reach that level. This is what the scale we keep talking about. But at the outset, before I answer your specific questions, I would like to, you know, convey to you that our guidance in terms of the credit growth of 14 to 16 percent is good. We will explain to you where and how we are confident about it. Partly I will explain and partly my other MDs will explain. That is about the credit growth. And the deposit side, we had originally given 11% to 12% guidance. But last quarter, we modified that guidance, you know, going by what is happening in the market. We said that we would be happy if we reach 10% stage. I think we are almost there. And as I mentioned, 52 lakh crores is something what we have crossed. So, we still be, you know, sticking to the guidance of credit growth and deposit growth of 10%. And this is eminently possible in the current quarter also. And the rates which you mentioned are basically YTD rates, but the year-on-year rates, this 14 and 10% will, 14 to 16% and 10% will hold good. Operating profit, yes, I think it was impacted quarter on quarter. Year on year I think we are okay. And the sequential basis we got impacted by the MTM losses. And it is also important to understand that the cost of resources have gone up. We are trying to see how we moderate this cost of resources. But the Behavioral shift of the depositors moving from the savings bank to fixed deposit. As I mentioned, our fixed deposit growth rate is more than 14%. So term deposits growing in the book obviously, you know, alter the CASA ratio and also, you know, push the CASA up. but we have a very strong franchise and the deposits when people want to move from savings to fixed deposits and at the branch level we would encourage the customer to get that benefit at the same time now we have increased our customer outreach in terms of opening high quality savings bank account particularly focusing on the salary accounts in the last nine months we have acquired 10 9.5 lakh customers, salary customer accounts, which means, you know, the CASA ratio would come back to 40 percent. That is our target, which would also bring down the cost of resources. And as far as visibility of corporate credit growth, I would ask, you know, Ashwini to supplement that.

So while the growth of corporate credit YOY is quite good as you have noticed, but the overall growth in terms of year to date has been less. But we have a very healthy pipeline, almost 4,83,000 crores consisting of 2,22,000 crores which is sanctioned, almost 800 proposals and 2,61,000 crores under process. And our hope is that substantial part of this will get disbursed. Last year also, last quarter saw a lot of growth, much more than this year. So, and the better part is that this year we have been disbursing through the year. So, we have been able to get the full interest income. So, hopefully, the target which we had internally of corporate credit, which is upwards of 10%, 12%, we will be able to achieve that.

Sir?

Yes, sir, I can...

Good evening everyone. That covers the corporate part. But on the retail part, if you look at our pearl, which includes REHBU, we have been growing fairly strong as actually on, I must say that we are on track. Whatever we had in mind is getting and I do not see any reason why we should actually go down in this, in the next coming two months also. We have seen fairly good growth. Agriculture has been around 15 odd percent year on year. Even QOQ is good. SME is around almost touching 19 percent year on year. Good. REHB also in the vicinity of 14 to 15. I think we are on track.

Sir, when we are talking about SME, now recently in the budget, both the investment limit and turnover limit has been 2.5 times and 2 times. Correct. So now there is a lot of opportunity in MSME sector will increase. Absolutely. Because some of the mid-corp, I mean, they will come under MSME and will get the benefit of MSME at the same time. that non-collateral CGT-MS has also increased from 2 to 5 crore, now 5 to 10 crores.

Yes.

So there you see some major growth coming in.

Yeah, what would actually happen is rather than new growth coming in, that may also happen. And existing. But then there would be a reclassification of some of what we already have as exposures. Some of the larger ones may get covered under this, but then definitely this will benefit not only the our clients, but us also in a way in case we get the priority sector benefit out of this, that will be good for us.

But this is likely next year, not so much in the last year.

It starts by 26th. But on the PSL front, what Vinay has mentioned, one is The micro enterprises definition is also modified. That means, you know, there is a subsector of micro credit which needed to be achieved and partly will be taken from there in our PSL category. And as you mentioned, some of the mid-corporates will move to medium enterprises. And that also will have to be PSL. But there are several other MSME levers which have been provided. One is the classification. Other is the CGT MSC cover increased. And export-oriented units, investing 20 crores also will be covered by the CGT MSC guarantee. So I think this 18% growth rate and just I'll take two minutes on the SME front. We have completely revamped the way the SME funding is done in the bank. We have introduced a cash flow based lending through a business rule engine today. We have extensively used our database both internal as well as external and used the GST data, income tax data and balance sheet data and account data and created this rule engine. Today we are able to give Disbursement if it is guaranteed by a CGT MSC in 3 days to 4 days. I think that turnaround time improvement has also contributed to improved performance on the SMA. This is what I wanted to tell you.

Sir, a small question on the SMA numbers. If you see last time SMA 1 had increased to 11,891 crore and you said that that time that many of which is already recovered. So SMA 1 number is okay, 2,128 crores, I mean come down substantially. But SMA 2 number has gone up to 7,424 crores from 1,840 crores. Is it that there is some of that those SMA 1 has come to SMA 2 and going forward. I will answer that.

Because though the overall figure is the same but SMA 2 has increased substantially now. SMA 2 there was only one major account which has become SMA 2 on 31st December. Has it been fully rectified? And if you adjust that number, it is coming to 3700 or something, SME2 numbers. And this account has been regularized, you know, fully, fully in the sense that, you know, proactively they paid the advance payment also going forward. So the risk of that account again falling into SME2 category is not there. So that way I think the SME2 is not a big concern at all.

Thank you very much, sir. I'll come back again in the second round. Permit me for on the international account, I wanted to ask something. Sure. But we'll ask later. Thank you, sir.

Yes. Next, please.

Mike. Hello. Yeah. Yes, sir. This is Akshay from Autonomous. Yeah. So, sir, I have two questions. One on your margins. So your margins have dropped by around 13 business points sequentially. So if you can explain what is driving this 13 basis points. So your advances, yields on advances have dropped by around 8 to 10 basis points. So what's driving this? And on the cost of deposits front, on a calculated basis, it seems to have increased by around 7-8 basis points and around 20 basis points in the last two quarters. So, while you have increased interest rates on the shorter tenor buckets over the last few quarters, like where do you see the cost of deposits stabilizing going ahead?

The yield advances has not deteriorated. We held on to the yield advances. If you see, I think it is year on year marginally a basic point increased. So, we held on to the yield advances. The cost of resources definitely has gone, majorly contributed by the cost of deposits. And cost of deposits year on year has increased as well as sequentially marginal increased. The margin compression was a combination of this cost of resources going up and also the treasury gains not being there as much as it was there in the Q2. But our core focus on qualitative advances growth continues to be there. So, our guidance is that the NIM would be higher than 3% and the ROE, ROA will be 1% and more than 15% is the guidance we are sticking to it. So, I do not think on the yield and advances, we are not compromising on that. In fact, in many cases, we are letting go of some of the loans where we feel that, you know, pricing is not acceptable. So, let me tell you that. And the SMEs generally is more profitable than the corporate advances and our growth rate in SMEs is likely to give some yield pickup on the average yield on branches.

So and your borrowings have increased sharply quarter on quarter. Is it refinance?

The borrowings are basically market borrowings and that is the liquidity adjustments essentially and the time mismatch of the cash flows. Normally if you see there is a huge amount of inflows into the banking system Particularly SBI, because the salary accounts what we have large number in the last two days of the month and first two, three days of the month. And then you have greater outflow starting from the 15th of the month because of the advanced payment of taxes, GST payments. So this cash flow mismatches will lead to, you know, some market borrowing. And also you see the investments also happening at the same time. So this is basically a treasury function. Okay.

And lastly on asset quality, your credit costs have been abnormally low in the range of 0.2, 0.3, 0.4%, pick a number. When you see them normalizing upwards like other banks are seeing and specifically on express credits, so your express credit GNPAs have increased from 0.77% in March 24 to around 1.11% as of today. So what's driving that?

So, first express credit, I think there is a base effect there. I think denominator effect, not base effect, because the growth rate has come down in the express credit. But there is no unusual quality issues there. So, we are hopeful that this express credit growth rate, which is now in the single deserts, will come back to double desert going forward, including this quarter we are expecting. So, which will, gross NPA percentage will definitely come down. There is no great concern in terms of the asset quality. The concern is in terms of, you know, we moved completely to a digital mode of lending. I think in the last quarter also we did mention that we want to make this process more efficient in terms of the express credit loan because it is a very substantial portfolio in the retail personal loan other than home loans now. So, that has now stabilized and we hope to get the benefit of that stabilization of the digitalization which has happened in this segment. And there is definitely an impact of overall sentiment of the unsecured personal loan in the system. We are not an exception, but we have the ability to come back to double digit growth in the current, hopefully in the current quarter, if not in the current quarter, definitely in the next quarter. And that is where you see the uptake in the GNPA, but is not a great concern for us.

The actual increase in terms of number is just 408 crores.

Yeah. And on the credit cost?

Overall bank credit cost? Bank credit cost, yes, yes. I think we are all riding a benevolent asset cycle now, asset quality cycle. Hopefully it will, I think I am a little confident that this asset quality would be maintained Because we focused heavily on process improvement and as I said some of the credit we do not underwrite. If you see on this is not the first time we are talking about the asset quality being good. In the last five years we have consistently shown the improvement in the asset quality. If you ask me if it is bottomed out I think there is only so much we can bring down when you are operating at 40 lakh crore advances level. But I feel that our guidance in credit cost of 50 basis point holds good through the cycles.

Understood. And so lastly on other provisions, so there is a negative number of 800, 900 close. What is that? Which one? Other provisions. Yes.

Under provision, I think just one second sir.

We will give you separate. Just one minute.

I think that is one account if I remember correctly.

I think then there is one account where standard asset provision was made and it was not required to be made now. So that has been reversed.

But we will give you the details later. I will just one second. No, don't need. There is one account there is a reversal.

Yeah, Maru.

Yes, sir. Sir, I had a question. Firstly, So I have a couple of questions. Firstly, on your NIM outlook, you did give that, you know, you will maintain NIMs at 3. Now, if rates are cut, of course, everyone's expecting a shadow rate cycle, but rate cut cycle. But if rates are cut for every 25 or say 50 basis points rate cut, any sensitivity that you could give on your margins, say on a whole year basis? That's my first question. Yeah. And then I have a question on this Forex income. It's a little low this time. Obviously, your fee income is very good, but your Forex income is low. So is there any reclassification from Forex to fees?

No, no. On the Forex, I think there's an MTM loss.

Yeah.

No, you mean your growth rate in the forex.

Yes, absolute amount of forex income.

Forex income is on account of MTM, right? Yes, I can support that. Sir, refer to MTM losses in the forex exporters. I think in the US dollar reference rates, whether the US interest rates are modified my bar, we have experienced a kind of adverse movement as compared to the kind of positions what we have in derivatives that has resulted in a mark to market kind of losses in Q3 as compared to Q2. But we have also seen with the corrections in the rates, we have seen again recouping of those losses as well. So these are more like a transitory. But of course, we are hopeful of this trend will continue so that the contribution of treasury will be better in Q4.

Got it. And sir, on the NIM thing, sir?

On the NIM, see, I think if it is shallow rate cut, as you are saying, Maruk, I do not think we will have major impact because The repo linked rates loans are low in our book. I think it is about.

Twenty-eight percent.

Twenty-eight percent. And if it is 25 basis rate cut I think we may not have more than two or two three basis points. Even assuming that you know some transmission will happen through the deposits also which means that you know the impact on NIM is unlikely to be significant. So if it is any higher rate cut, I think we may have to look at how we manage on the resources side.

Got it. And so on OPEX, would you like to call out anything in terms of contribution to employees because actual provisions have gone up, but that is just an interest rate function?

Yes. Okay. There is nothing significant on that.

And so just one last question on life insurance. So there was a FM, Madam FM had, you know, raised some concerns at your conclave only about the way life insurance is sold. So is your bank assurance impacted by that or you are already compliant and there will be no impact from that? This time, of course, it's been good, the cross-sell revenues. But just what do you think on the outlook on bank assurance given the comments that FM has made recently?

I think the emphasis is more on right selling. And I think we have done quite a lot of work in terms of ensuring that the products which are sold from bank channel are, you know, appropriately sold. The measures include both at our level as well as the SBI life level. For instance, life insurance companies are not required to have an internal ombudsman, but we have constituted an internal ombudsman in SBI life to look at any of such complaints or cancellations which are happening to go deeper into it. and the free lookup period and you know cancellations all these things are looked into very seriously to see that are there any post selling or miss selling happening and some of these complaints which come our level of number of complaints is very limited in SBI on the SBI life and Those complaints are also examined by the internal ombudsman in SBI. So we put a lot of checks and balances to ensure that. And another thing I want to tell you, I think I must have told earlier also, every product, whether it is life insurance or any other JV product which is sold from SBI, that product appropriateness is approved by none other than MD in the bank. No product can be sold at the counters of SBI without approval of the MD who is responsible for the retail banking. So, I think we are making lot of efforts to see that the right selling happens there and obviously the concern is in terms of you know how do we increase the right selling part.

I will just add that the complaint numbers as defined given by IRDA for us are the lowest in the industry. So therefore, while concerns are noted, but at the same time, I think we are doing what we can, both the company and us. I don't see we have too much of a challenge in that sense.

Okay, got it. So just one last question. Basically, on loan growth, so you've given a corporate sanctions and disbursal pipeline, would you have a very rough idea on how much of it is capex and how much of it is general working capital?

We have, I think it is, we can put 50-50. And the CAPEX is significant. I think the most pipeline what he has spoken is essentially coming from the CAPEX.

The entire pipeline of four?

Most of the pipeline. Most of the pipeline is coming from the CAPEX.

Okay, sir. Thank you.

Chairman, excellent performance on all parameters when we look at whether ROE or ROA or cost to income. Last quarter, we discussed about retail credit. Corporate credit, you have performed excellent. And overall credit also near the lower end of the guidance, 14%. Retail, we have seen there's a slight downtick, 11.6%, mainly due to maybe lower growth in auto loans of 10%. Now, there were certain reasons for that. Would like to know the strategy because apparently this Q4 should be the best quarter for the auto loans where we can much more can make up the growth in retail. Gold you have performed excellent. What is your strategy for that? And particularly looking at would like to have your observations on the multiplier of the post-budget strategic liquidity push given by the finance minister. What would be the impact on demand growth and retail? So once retail credit goes up, our names automatically can improve substantially and also the profitability. so this is one second observation was uh our valuations when you look at the your slides with the consolidated financials 22 plus operating profit growth excellent performance from your remc sbi caption general it is actually it needs to be highlighted much more it is there in the slides when you look at it we have never seen any bank In Q3, give such reported numbers in terms of all parameters. So your observations, particularly on the demand multiplier, how you see it kicking off in overall credit demand, whether retail or corporate, and also the retail lending push where there was a slight uptick, downtick in the overall credit growth of 11.67%. And what is the potential of going to 15 to 20% or home loans are on track. And there's a further push also on the in the budget for the housing sector in a big way. And with this, I'll wish you all the best. I'm Manoj Alamchandani. Manoj ji, you told the whole economy. So let me just disintegrate that and try to answer the individual questions. I think the first thing what you mentioned in terms of budget proposals definitely are value-accurative for the banking industry. particularly for State Bank of India because much of these segments which are getting benefited out of the budget announcement, both on the tax cuts as well as on the demand push, particularly on the SME and agriculture side, they are our strong points. So, we would definitely get benefit out of that and on the savings potential, it is estimated that 20% of the deposits are held by the senior citizens. And if TDS benefit is given to them, we hope that most of their savings would come to banking system. And we hold a majority of that market share in the senior citizen category. The second point which you mentioned in terms of consumption, our economic research department estimates that the consumption multiplier is three times. So if there is a saving surplus because of the tax rebates or exemption of tax up to certain income level, So definitely that would be having a consumption multiplier three times, if any savings. A part of savings probably would go to consumption and some part will come to bank deposits, will get benefited out of that. And a part essentially will go to the investment because the behavior of the customers has changed. So that is on the budget proposals, both in terms of the credit side, the consumption demand is going to spur the personal loan segment. And our personal loan segment today is at the lowest level, 2.84 credit growth rate, because as I mentioned, we wanted to make systemic improvements, which we have done. And the second thing is that the overall system impact on the unsecured personal loans also had affected us. But this consumption demand is definitely going to result in growth in the express credit. That is our unsecured personal loans. Auto loans, I beg to differ from you. I think we have done extremely well. 10% year-on-year growth rate and today 1.24 lakh loan portfolio is the market leadership in the auto loans. And Q3 has been a phenomenally good quarter. It normally happens that October, because of the marriage festivals and all, has been a good quarter. I only hope that it gets repeated in the Q4 also, because as you said, Q4 generally is a good quarter, but we have had an excellent Q3 in the auto loans. Hopefully, we will maintain that growth rate. Home loans, yes, 14 to 15 percent is a creditable one. And as we speak, we have reached a home loan portfolio of 8 trillion rupees. I think that is the largest home loan portfolio in the market. And with the best asset quality, 76 basis point. is our NPA percentage here and which means that you know the segment is going to witness further growth when the whole retail loans is based on what is called EMI to NMI ratio. As the net monthly income grows, I think their ability to support higher EMIs is there. And hopefully the people borrow more, but more meaningfully. That is what we are trying to do. And you did ask something about, I think broadly I answered your questions, right? Right. Thank you. Subsidies. Yeah, I think most of the time you have to tell us why we are not getting the value. Yes. Thank you. Thank you.

Now we can move to the next piece.

Okay, if there's no one, can I ask one question? Just wanted to understand, does each department have its own PNL in the sense that when you're doing your corporate pricing, you will be pricing in some credit costs. Now they're actually much lower than what you might have priced in. Would you use those benefits to maybe subsidize retail loans? Or corporate P&L is separate, retail is separate?

I do not call it P&L, but we have certain broad contours or guardrails that, you know, underpricing does not happen across the product segments. In corporate credit, we have what is called risk-adjusted return on capital, and that is a benchmark 20%. And they have to really justify if they are not getting 20% on any of the exposure. On a portfolio basis, we are able to maintain that 20% risk adjusted to non-capital on the corporate side. As far as retail is concerned, it is a little more complicated because You can't look at the pricing on a standalone basis. The home loan customer brings me a casa, he will borrow, you know, in other products. So we look at what is the product per consumer and whether it is creating value. While some of these retail products, some of them are high ROE product, like home loans, and some of them are high ROE product, like express credit. So we need to balance the portfolio in terms of, you know, what is our best outcome. And in case of gold loan, for instance, there is a high ROE because there is no capital allocation at all. So while the product level P&L is not there, businesses always have a business mix at the detail side, corporate side. that what is that risk urges return on capital they are looking at. In fact, we have risk urges return capital for each product also.

But what if you exceed that? Let us say corporate bank is making 25 percent rate of hypothetically. That extra 5 percent would you invest in retail? That is my question. No, no.

I think it is all combination. But we are also trying to bring a discipline among the business units by allocating what is called risk weighted assets. if they are exceeding that RWA they have to take permission from one of the committees so that you know we have monitoring of the RWA allocation and they have to justify why they are taking the RWA and last time also we made a presentation on risk written on risk weighted assets is something what we focus on the business student level.

So my second question is just broadly for you all and PSU banks have not really invested much in branch network over the last five, seven years. And over the last two years, you all have deployed excess liquidity to grow loans faster than deposits. Now, LCRs are similar to private sector banks. Is there a case to be made that deposit growth for PSU banks can pick up to, let's say, 12, 13 percent without a rate war?

We are not getting into the rate war. I think Adir also has said that the customers, we have a big franchise of deposits and deposit mobilization for SBI is a franchise activity. And obviously, you know, customers expect to be compensated properly. And that is how the rates are aligned to the market. A lot of times people ask me when you have such a CD ratio, why do you want to mobilize deposits? I think it should be understood from that context. So, and the branch network, you mentioned something about branch network. I think today we have the largest branch network. But it is not stopping us to grow in terms of the expansion. We have 500 to 600 branches every year to be opened, especially in areas where our presence is not there, particularly in the new colonies which are coming up, new metro agglomerations which are happening, but we do not have the presence. We are coming up there. So our branch network is not stopped. And we are also, you know, enhancing the branch ability to service the customers, both in terms of, you know, wherever the potential is there, give additional staff there and also do use our feet on street, outsource feet on street to strengthen their ability to service the customers. I think a lot of effort is going on in terms of customer outreach.

Due to paucity of time, we already have reached a figure as of yesterday 22,800 branches that means in this financial year we have opened 277 as of now and the plan is to touch 400 for sure and maybe around 425 to 430. We do not want to open hole in the wall sort of branches. So, we take some time to, all the surveys are done, potential has been appraised, now the premises and that is taking a little bit of time.

Thank you, sir. Due to paucity of time, we will be able to take one more question, followed by a few questions coming in through the online webinar, which will be addressed by the chairman, sir.

One question. Good evening, sir. The question was particularly on MCLR. So last time we indicated that there is some repricing which is still left of the LR loans. So how much are we done with? And you mentioned like there is still room to increase the MCLR if there is a need to protect the margins. And we have seen that decline in margins coming through over past couple of quarters. So, how much of repricing is left and any kind of a change in MCLR which we would look forward to? Definitely, there will be a rate cut, but still our stance on the overall MCLR rate.

So 35 basis points still there is a room for increasing the MCLR but as you mentioned if there is a rate cut optically you know we cannot increase the MCLR. We will definitely look at the competitive environment which is emerging but I think the rate cut also would help us in terms of reducing the cost of resources particularly you know movement of interest rates if not immediately there should be some monetary transmission happening going forward. So The margins will stabilize, as I mentioned, 3% above. We still are sticking to that. And you asked something else also.

So I said like MCLR repricing is done, whatever rate hike has been affected since past six months. Are we done or this will be towards like post-December?

No, it is yet to come. Next quarter you will see the impact.

So repricing benefit will be reflected next quarter. Because see, most of the repricing of loans happen reset date. Reset days are generally six months MCLR. So that means, you know, every six months it gets. And also people come, there are 12 months resetting also in case of working capital limits when they come for review. Got it. Yes. Thank you. I think a couple of questions we will take quickly and then we will go to the next.

On margins, I think we need more debate. Like particularly on the margins front, the quarter on quarter sequential drop that we have seen, is it also to be seen from that there were lower interest on recovery during the current quarter or there was some penal interest related impact which actually came through in the quarter or is it all explained by the Higher cost of funds. No, no. Predominantly explained by the cost of resources. In that case, how do we see the next quarter's margin? Because the cost of funds are not going down any time. And if basically there is a rate cut, obviously at least on the 28% of the portfolio, you are going to pass it on if there is a rate cut.

So that 28% pass on will not really be impacting in a significant manner if it is a shallow rate cut. In terms of cost of resources, there is a conscious effort to increase the savings bank portfolio and increase the CASA. And probably the deposit mix will be undergoing change. They are making a great effort in that direction. And that is one way of bringing down the cost. You are right, I think in terms of yield and advances, we are broadly maintaining this level. But we are also focusing on other income. See, if you see the margins also got impacted because of the treasury losses, which we are not accounting for that, you know, things will be better now. But as MD mentioned, some of them, those losses have been reversed in the current quarter. So the combination of focus on the low cost deposits, combination backed by, you know, some treasury reversals of, you know, losses. But more importantly, I think we will be focusing on, if you see, just show the other income slide where, I think every lever of other income other than the treasury gains, you are not showing there, right? Okay. So, yeah, I think it is in the book, slide number Slide number 17, if you see, every non-interest income lever has been utilized. We are going to focus on that. And Q4 generally is good in terms of the other income.

But, sir, how will the treasury gains impact your margins? Is it possible for you to explain that?

Yeah, yeah. So, in terms of MTMs, you know, whatever we have booked in Q3, they are reversed. They are all in the FV, TPL, HFT category. So, they are all rooted to the P&L only. No, no, I'm just talking about the margins. How does it basically... No, ultimately if the... P&L increases, net profit increases, so it will, in terms of NIMS it will not, RYA definitely will improve.

That is what I want. Yes. So, yeah, second my question is that on your express credit, so there is a slowdown which basically you have done, is it all to do with the digital shift that you are doing or is it that on the ground you are seeing some over leveraging concerns because lot of channel checks suggest that Even in the government employees account, you know, in the northern states and all, there are a lot of over-leveraging which has happened. And that be the case, is that a conscious call to slow down a growth a little bit now, accelerate later on once these over-leveraging concerns are out, the daring when she levels. Is it possible for you to share because you do not put that into the SMA 1 and 2 buckets? Any early signs of, you know, the SMA, SMA 1 pool actually going up into the retail segment?

We are not seeing any significant over leverage as we mentioned, you know, at least in the, you know, information which is available. The over leverage is not seen. If you ask me the slowdown is only an account of technology movement digitalization, I mentioned that, you know, the overall softening of unsecured credit is also reflected in our books. But not definitely in terms of the concerns on the over leverage of the customers. We might have taken some conscious decision that, you know, if the whole system is not growing so fast, we didn't want to grow the way we were growing earlier, 30%, 33% CAGR is unlikely to return. But we have the potential to make it double digit. I can definitely say that.

So, in this, we were kind of preempting the market. This slowdown has started happening recently, last two quarters. We were seeing some deviations coming in the scheme where people were like salary somewhere around. And to check that, we kind of made it stricter. The deviations were to be approved by a higher authority. So combination of those checks and other things. slowed this down and now as it shifts into digital it will become much more easier. That is why the chairman is saying it will be much better going forward.

So that would I think sorry to pick it up right because I mean now that you have slowed down the energy.

It is already picking up. Okay. I think on the your risk intensity if you look at the RWA intensity actually is going up despite you growing a copper book this quarter any thoughts on the capital raising there is a change in management so we just want to hear your views change in management does not change the approach so I think that is always on our radar as I mentioned a lot of people ask me either you remove this line or raise the capital So, the timing we are still working in terms of, you know, we are engaging at various levels. So, let us see. Yeah.

So the risk rate actually has increased primarily because of the investments in that category.

So the investment RWAs have gone up, not on the credit RWS. And investment is a conscious decision to add some growth in that segment and then take advantage of the moment.

Yeah. Thanks a lot, sir. Nice to meet you.

So we'll take on the web. There was one question from Mr. Rakesh Kumar. What was the reason for the sharp fall in FX-related income? I think we have answered that question. And what are the reasons for write-back of standard asset provision also I think was answered. But I'll just repeat. The sharp fall in Forex-related income is due to MTM loss and derivative transaction, which was mainly because of appreciation used INR rates. Right back of standard asset provision is due to a large corporate COVID destructed account exiting from restructured standard. And question from Mr. Parvesh, what would be the bank's approach towards AI? I think our approach to AI is essentially we would like to do have an enterprise level AI. There are quite a few use cases we have identified. And these use cases range from personalization, hyper personalization to staff learning, staff knowledge base and the risk management. I think the whole range of use cases have been identified. In fact, yesterday or day before yesterday, we just launched Ask SBI, which is the repository of information for all the staff members using the Gen AI. And this is going to improve, you know, their ability to answer the customer queries on the counter. And also this Ask SDI, what we have introduced, will also give them step-by-step. We are trying to give them the standard operating procedure for any question the customer have or any customer need. So, and we have a very strong analytics team which is working on other user use cases and roadmap for the adoption of Jena has been created and the broader AI roadmap of the bank is there and we probably were the first bank to introduce a policy on responsible AI even before the regulator I have spoken about. Question from Mr. Gaurakumar Panda. even after expected good Q3 for SBI is the low growth rate of low cost deposit and slow down in overall deposit a concern for the future. I still feel that the overall deposit growth rate has been robust. 9.8% on a basis of 45-50 lakh crore deposits. We have done fairly well on that. It is only the deposit mix which I mentioned that we would be concentrating on increasing the low cost profile of the deposits and so just to answer I think the customer preference to move to or lock in the higher rate of interest in the term deposits has changed the composition But if you notice, current account, we have grown 14%. I think we have not got the market share numbers, but I think we are still on the flag, you know, pole position in terms of the current accounts. Our effort on CASA will continue. Jatin Parashar, deposit attracting initiatives and schemes, I think we have definitely spoke a lot on the deposit mobilization effort. But I just would like to ask Vinay in terms of, you know, the focused efforts in terms of the deposit mobilization.

A couple of things which we are looking at. Particularly, let me talk about CASA in terms of CA as well as SA first. CA, we have taken a lot of initiatives in the last one, one and a half years, which was started by Mr. Rana. And these initiatives, particularly with the sort of sniper attack, we were looking at some of the institutions, basically, which could give us more and more balances apart from, you know, so we have also variants in this current accounts, which give us more balances. And if you really look at it, when the efficiency in the financial system goes up, the current account balances go down, right? And this is what we observe otherwise even in the industry. And this is what we are trying to tackle. And you see the result of those efforts in that 14% YOY. Now, if you look at the savings bank, again, we would have loved to be much higher in the YOY growth. But then it is actually not too bad if you look at the numbers which have and there is also a behavioural shift pattern that is seen because of the higher interest rates which the term deposits offer and it is observed that whenever there is a gap between the savings bank interest rate and the term deposits because of the higher interest rate scenario naturally there is a shift. There is a temptation for the balance holders to shift to the term deposits and that is exactly what we are seeing. You also see that in the growth in the term deposits right. So it is not actually the balances leaving the bank it is actually shifting and across the industry. Apart from that we are now also opening the chairman recently had launched two products basically for the term deposits but we want to increase the engagement with The existing clients and new clients which would eventually get us more savings bank and Karsa deposits. I mean, I can list out a few more, but I think in the interest of time, I stop here.

So, next question, Ruchi Jain. What SBI is doing to cater Zenzi? I think one data point I would like to give you that contrary to what people believe, 36% of our customer base is less than 30 years old and apart from that there is lot of effort in terms of hyper personalization which we are trying to do and increase the digital offerings and We have large number of digitally onboarded customers now, digital natives, what we call. And in, I think sometime during July, we would be launching our Martech marketing technology. which would further enhance our ability to gamify the products and you know hyper personalize the offerings. So I am sure the Gen-G will continue to be there with us. I think we are attracting enough and we need to make them more interactive with us. Ashutosh Mishra, reason for Forex income drop, I think we have already explained this. Deepak Gupta, SME loan growth of 9% quarter on quarter in current quarter has been very strong. Is this sustainable? We are doing quite a few things on the SME. I think I mentioned about the BRE. Business Rule Engine in the last nine months of its launch, we have done more than 35,000 crores worth loans disbursed to the BRE. And our TAT has improved and the announcements which are made in the budget in terms of both export promotion, SME recategorization and SME CGT-MSE cover being increased. All these are, you know, we are confident that we will be able to maintain this growth rate. Sunita Thakur, what are the reasons for increase in credit costs and year-on-year basis? Give us some break. Credit costs has increased for nine months year-on-year basis from 0.25% to 0.37% in December 24, mainly on account of increase in ageing provision. But I think the nine-month credit costs 0.24% is one of the best in industry. Rakesh Kumar, what was the reason for the sharp fall in FX related income? What are the reasons for right back of standard asset provision and other? The question related to FX related income, I suggest my treasury really have to work on foreign exchange. Everybody seems to be concerned on that. But I think it is so transitory, hopefully things will be reversed. Reasons for right back of standard asset provision, we have already explained that one large corporate COVID restructured account has been upgraded now. What would be the bank's approach towards AI? I think we have already answered this question. Thank you very much.

I trust all the questions have been.

Yes. Mike only, I mean you have heard me. So some color on the international book. It is a very, very, in fact, Of the size of a smaller public sector bank, the international book itself.

I will give some initial remarks and then you can supplement. One is the international book, as you mentioned, reached a stage We have crossed 6 trillion in the customer credit. It is a fairly large book and 15% contribution to advances size. But the portfolio is a very balanced portfolio. We have equal proportion of, you know, local credit, ECBs and trade finance. And all these product segments which we operate in, we don't take very long term exposures in the international book. In the trade finance, while we primarily focus on our relationship back home in India, we have participated in the global supply chains across the globe. So, The supply chains will have to see the trade finance. We will take a call how these tariffs are going to shift this supply chain financing, which is primarily concentrated in the US. So we'll have to see how it is going to play out. But our international operations are extremely flexible. You have noticed in the last four, five quarters that if you want to ramp up, we are able to ramp up. If you want to reduce, we are able to reduce. Just a supplement, Chairman, sir. That is the ability of our international banking group to play a complementary role to the domestic. So that means we are aware of the margins etc. It has improved generally the margins in international banking group also move in line with the trajectory, interest rate trajectory. But one advantage of IBG operations is like just from the data what was presented in the day, while the yields have come down by 32 basis points over a quarter, the NIM has compressed only by 8 basis points. So, that basically shows our ability to raise resources at a competitive price and also we will be locking into the margins. So, only the lag effect can be there in future in terms of having a very marginal impact on the bottom line even when the rates come down, but it is it would not be very very significant.

I trust all the questions have been addressed. We will be happy to respond to other questions in offline mode. Let me end the evening with thanking Chairman sir, MD sirs, DMD madam, top management team, analysts, investors, ladies and gentlemen. We thank you all for taking time out of your schedule and joining us for this event. To round off this evening, we request you all present here to join us for high tea, which is arranged just outside this hall. Thank you. Thank you so much.