State Bank of India

I am Pawan Kumar, General Manager, Performance Planning and Review Department of the Bank. On behalf of State Bank of India, I am delighted to welcome Tenali's investors, colleagues and everyone present here today on the occasion of the declaration of the financial year 2025 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 Sri C.S. Shetty at the centre, our Managing Director Corporate Banking and Subsidiaries Sri Ashwini Kumar Tiwari, Our Managing Director, Retail, Business and Operations, Shri Vinay M. Tonse. Our Managing Director, Risk Compliance and Sajji, Shri Rana Ashutosh Kumar Singh. Our Managing Director, International Banking, Global Markets and Technology, Shri Ram Mohan Rao Amara. Our Deputy Managing Director, Final, Shri Mati 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 chief general managers of different verticals and business groups. To carry forward the proceedings, I request our chairman sir to give a brief summary of the bank's financial year 2025 performance and the strategic initiatives undertaken. We shall thereafter straight away go to questions 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 a variety of factors. Thank you. Now I would request Chairman Sir to make his opening remarks. Chairman Sir please.

So good evening ladies and gentlemen. We thank you all for taking some time out to join this analyst meet. Post announcement of FI25 results of the bank. The financial results for FI25 highlight continuity. consistency, profitability and SBI's significant long-term strengths. At the outset, I would like to thank all of 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, SBI has remained focused on strengthening the key components that contribute to this sustainable value. We have prioritized our liability franchise, refined our processes, continue to improve our underwriting standards and aim 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. Escalation of trade and tariff tensions and the resultant financial market volatility have raised concerns regarding the weakening of global growth in the near term. As per IMF, the estimated global growth is projected to drop to 2.8% in 2025. And 3% in 2026 much below the historical that is 2000 to 2019 average of 3.7%. As per the WTO world merchandise trade volumes could expand marginally by around 1.7% in 2025. The dampening global economic outlook could impact India's economic growth through weaker external demand, even though the domestic growth engines, consumption and investment are relatively less susceptible to external headwinds. Prospects for the farm sector have been boosted by the forecast of an above-normal southwest monsoon for 2025, which could augment farm incomes and keep food prices under check. Given the exacerbated uncertainties due to recent trade tariffs, RBI has reduced its real GDP growth projection for FY26 by 20 basis points to 6.3% in the April policy. Separately, India's CPI headline inflation has now significantly moderated and we believe average CPI headline forecast for FY26 could stay below 4% now. During FY25, ASCB's credit growth declined to 11%, which was 20% last year, and deposits to 10.3%, which was 13.5% last year. Term deposit growth continued to outpace growth in savings deposits. Consequently, the share of term deposits in total deposits rose to about 62%. CASA declined to below 40%. Asset quality of SCBs improved further with their GNPA ratios declining to 14 year low of 2.4% in December 2024. CRER stood at 16.4% in December which was much higher than the regulatory minimum ratio. RBI has deployed a strategic mix of interventions, including open market operations, daily variable rate repo auctions and dollar rupee buy-sell swap auctions. These proactive measures have helped stabilize market liquidity conditions, ensuring financial resilience in an unpredictable global environment. Coming to SBI, once again, the results 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 a commitment to fairness for all stakeholders. The net profit for the year was Rs 70,901 crore, up 16.08% year-on-year. At the end of the year, our whole bank credit growth was 12% year-on-year, with domestic credit growth at 11.56%. Deposit growth was 9.48% year on year, while the CD ratio domestic was 69.71%. We maintained stellar asset quality with slippage ratio of 0.55%. Retail personal slippage ratio was at 0.48% and credit costs at 0.38%. PCR was at 74.42%. Some details about these numbers. The total deposits have grown by 9.48% to 53.82 trillion. As I mentioned, term deposits have witnessed robust growth. They have grown by 11.48% year on year. Our current account deposits have grown by 27% year on year. And CASA deposits have grown overall by 6.34%. And CASA ratio was close to 40%. Importantly, the current account growth has continued to remain strong for the bank during the year despite competitive market environment. The credit growth continues to be good across all segments. Our domestic advances have grown by 11.56% year on year, driven by 16.86% growth in SME, 14.29% in agriculture, 9% in corporate and 11.4% in retail personal segments. Our foreign offices' advances have grown by 14.84% year on year, The domestic credit deposit ratio is 69.71%, 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 FY25, as I mentioned earlier, was 0.55%, while the credit cost stood at 0.38%. Net MPA improved by 10 basis point. We have a well provided net and MPA book with PCR at 74%. The asset quality of the bank has continued to remain strong over the last 5 years which demonstrates The quality of our loan portfolio, the robustness of our underwriting processes, effective collection efficiency and the leadership of the bank across business lines. Our capital adequacy ratio is at 14.25% and the CET bond ratio is at 10.81% and are well above the regulatory requirements. Based on the current profitability and growth profile of the bank, we believe we have sufficient headroom to take care of business growth requirements. I am glad to share the progress we have made in digital banking which is an ongoing journey. More than 8.77 crore customers have been registered on the UNO with 64% of regular savings bank account opened through UNO technology in FY25. Our subsidiaries are consistently performing well. and continue to create significant value for all the stakeholders. We will continue to nurture these subsidies and maintain leadership position in the respective businesses. We are glad to advise that the bank continues to report ROE and ROE greater than 1% and 19% respectively at the end of FY25. A key point regarding these metrics is our operation at a substantial scale. We reported total assets worth 66.7 lakh crore, total advances at 42.2 lakh crore and total deposits amounting to 53 lakh crore. When we mention scale, it indicates the bank's extensive investment 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 FI25, We are also mindful of areas for further improvement and also challenges emerging from various developments taking place across the globe which may impact Indian economy. On the liabilities side, we continue to focus on increasing our share in current account while maintaining our leadership position in savings deposits by further strengthening our customer service and branch network. Although the bank's cost base is substantial, it highlights our commitment to compliance and efficient operations. We intend to reduce our cost-to-income ratio by concentrating on increasing income. The bank's ROE profile is currently higher than its credit growth, implying that see it even accrual in the future. From this strong position, our goal is to consistently achieve a ROE of over 15% through the business cycles. The board has granted approval to raise equity capital up to 25,000 crores. with the authorization being valid for a period of 12 months. This is an enabling resolution. Although we are open to capital raising, such plans will be contingent upon the business needs and market conditions. 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 take your questions. Thank you very much.

Thank you, Shamil sir. 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 questions to the financial results only and no questions be asked about specific accounts please. In case you have additional questions, the same can be asked at the end. We now proceed with the question and answer session. Please.

Yeah, I am Ashok Ajmera. Sir, compliments to you, sir. In one of the recent meetings, I said that our operating profit we are capable of crossing 1 lakh crore, 1 lakh 10,000 now, exactly that same figure I said and you have achieved it. Compliments for that. Phenomenal numbers, good growth in spite of little difficult time in both deposit side and as well as credit side. Having said that, sir, I have got a couple of questions, some observations and some data points. One is that, sir, on the credit growth, like we have been maintaining last year that our target was 15-16%. in I think a quarter back I had only had raised this point that we have achieved only 8% I think till December 8.2 or something how are we going to achieve it and our confidence was that yes we have got a strong pipeline and definitely we will try and achieve the given targets but finally it came down to 12 point something so on that I mean, what has gone wrong just in two, three months that as against our targeted numbers, which was very good encouraging and good pipeline, in spite of that also we could not achieve that number. So that is one. My second question is, sir, that all the TV channels are streaming that net profit of a state bank is down by 10%. Now, they are just looking at Q4 24 of 20,698 crores and now 18,643 crores. If you look at it, the operating profit has gone up by almost 9%. So, but because of the higher provisioning. In this quarter, this net profit and they got the chance to say that SBI profit has gone down. Could we not have used some of that buffer provision which we have got more than 30,300 or 500 crores, something out of that? And what was the need of almost about this 6000 crore of provision in this quarter itself, which has given the opportunity for others to say that the profits are down, though it is not actually in fact. So this is the second of my some observation and your response on that. Thirdly, sir, if you look at the segment wise results, There is a very deep variation. There is a strong variation in that in segment numbers. The treasury numbers are haywire from 891 crore to few thousand crores and wholesale banking, retail banking, the numbers have gone down by few thousand crores. So is there any change in because segment also gives some impression proper this thing that how is the bank is moving in which direction and under which segments. So if you look at it there are quite large variations in that. So on that also if you can throw some light on that that is there a change in the method of calculation. And lastly having you only has said that now another 50 bps point reduction may come. Some people are saying even 75 bps and we have got a strong investment book. So do we expect huge bumper profits on the treasury account this year in FY26 which may take up our bottom line also to a great extent? what do you say I mean what colour you would give to your treasury operations both in the trading profit as well as the profit because of the mark to market part of which comes to the profit but AFS goes to the reserve but still what we expect into FI26 because of the trace cuts.

Thank you Ajmer Asad for the compliments and also the critical questions which you have raised. Yes, we did given a guidance last year. Not guidance. I think we have expected credit growth to be 14% to 16%. In the Q2 guidance, I have said this. And in Q3, I moderated that to the lower end of 14% to 16%. So there are, obviously we expected the year to close at 14%. If you see, most of the segments you can see on the screen, we have done, actually you are not able to see, I think the presentation it is shown, slide 16, which shows that in many segments we have done well except in the corporate. Corporate is a bulky and chunky credit and we have had an unusual prepayments in that segment. So while we have had a good pipeline, which I mentioned earlier also, even now we have around 3.4 lakh crore pipeline in the corporate side. The unanticipated prepayments definitely had impacted us. It is nothing to do with any of the segments not doing well. Many of the large central PSUs have utilized their equity funding to deleverage. And that we could not cover in the short tenure of one quarter. So that is the major reason. Otherwise, we still have the visibility on the corporate side. And that is the reason why we are not saying that it would be 14% to 16%. But 12% to 13% is quite possible, while the industry is growing less than 12%. This is on the credit growth side. And the net profit, I think, I mean, the numbers have to be understood by everyone. But our idea is, our focus is always to strengthen our balance sheet and also create a consistency in our performance. It's not about one quarter we try to ensure, but our preference is that if any costs are visualized, let us take them up front. If you have seen, it is not only this time, Last year, 7,000 crores of pension provision we have taken in one go. We could have taken it in four quarters. I think that was permitted. So front-loading the cost has always been our strategy. And you are right. I think the ideal way of looking at it is the 12 months performance on an aggregate basis. And in many parameters, we have done extremely well, either on asset quality in terms of ROE, ROE guidance. We still stuck to it. So the PAT has been, I think, has not been our, we didn't want to show that we can make the similar profit what we have made. And we know for sure these costs are likely to happen. So some front loading of provisions have happened definitely that has resulted in this. Yields, moderation in treasury yields definitely would help the markets to perform better. And I think our treasury will do. While we are not willing to give any guidance on this, Ajmera Saab, we will believe that with the rate cut cycle kicking in, the yields will definitely moderate, providing an opportunity for us both on the MTM side as well as on the trading profit. But we will be a little more objective in terms of any guidance on the treasury side. Thank you. You asked something about segment wise. Yes.

Yeah, because you see in treasury operations income from 843 crores to 8,891 crores. Corporate, okay, 74 to 84. But retail banking from 17,311 crores to 9,325 crores. So either we remove this giving it, you know, segment wise numbers only if they are not relevant. Or we do some working which is consistent. We will ensure that.

May not be in a slide. You're talking about from the balance sheet side? Yeah, segment results. Segment results, just have a look at it. No, it's okay.

I mean, if it is... Good evening, sir. Yeah, good evening. You can have a look.

Yeah, please go ahead. Thank you. Thank you, sir.

So, sir, I have a couple of questions. Firstly, on the provisioning, if you see the breakdown of provisions, then there is an adho provision of 16 billion or so. So, what is that about? Because it looks too big for that line item. So, maybe there is some one of there. That's my first question. And then on asset quality, so when I go through your movement of NPLs, there are some banks that have seen recovery from a very big account, right, and it's visible in their recovery line. So maybe it was written off for you, I don't know. But we don't see any recovery here. from the movement of NPLs of a large account. And that large account, the lenders are public. So you're one of the largest lenders there. So it's not a recovery. It is transfer to NARCL. So I'm talking about that account. Where would that have been booked? Because other banks have disclosed where it's booked and, you know, roughly how much has been booked from there and where. So that's my second question.

You can answer on the second question.

And my third question is in employee expenses. This time round, I'm not talking about the pension provisions. I'm not talking about the provisioning of benefit part. But in employee expenses, the actual wage cost also looks higher sequentially this time. So how do we budget or how do we, like, forecast wage costs for next year? Year-on-year, of course, for the full year it's 6% growth, but just in the fourth quarter, the wage cost. So those are my questions.

Let me first answer the wage costs. I think Q4 we take a lot of provisions. the PLI and many things which are added to the staff expenses, which are not in the earlier quarters. It will appear only in the fourth quarter. Got it.

So 6% growth is next year also, right?

That's all. And on the account which you mentioned, though we don't talk about specific accounts, but I think the accounting can be mentioned.

So without naming the account, so the account you mentioned, I think everybody knows this. So roughly 3,300 was the component we got and 500 plus roughly went to the MP reduction. You can see it will come in the recovery piece. Remaining 85% is the Treasury income, RBI circular, which came on 29. So somewhere in the treasury state.

Sorry, sorry.

Provision. So, 500 crore roughly. 15% will come into NPA reduction. Recovery you can see that number in the NPA reduction. Remaining will be on the SR revaluation which came in the last week of March. That will go in the treasury side.

On the other income side. Yes. And has anything been booked into the NII? No. From this net interest income? No.

500 crore will go into, not NII, it will go into the NPI reduction. Got it.

Because it was a fully provided account. Yes. So it will impact the provisions and the SRs we use to hold at 1 rupee. So subsequently on 29th March, RBI has given a clarification that if you have SRs which are governed, guaranteed by the government guarantee, I mean backed by the government guarantee, we can revalue the SR. So you see in your global market, I mean our treasury profits, the revaluation profit also is shown there. Some of the recovery related to what your account you are talking about also is appearing there.

Got it. And how much would that be both of?

We will give you that. Okay. and capex cycle.

Now, which are the countries where the foreign branches growth is higher than domestic growth, because we have a widest network of foreign branches operation, if you can highlight that, and also the output in the year ahead, because of the transformation in the economy, foreign economy particularly. The second is our valuations. We often talk about valuation, and of course we are among the Very, very undervalued bank. And compared to the run-up in the bank, it is the highest. and others are going much higher. We deserve maybe a valuation of Rs. 1,200 if not Rs. 1,000 immediately. There's some operating propaganda numbers. Now on clarification, most of the analysts and databases, they look at valuation basically not in terms of PE ratio but in terms of price to book, right? Now when we look at our slide here, slide number 10, the valuation per book value per share and the in money control which claims to be a number 10, top 10 capital market websites in the world in terms of unique visitors and viewers. There is a big discrepancy and we feel money control is far. Number is correct. They talk about price before 1.57. And here slide number 10 for after long time we saw the slide book value per share. It shows historic book value based on last year's today we are 2. Of course, it needs to be updated with the current one. I would like to know how you calculate, because when people compare all the banks, they go for money-controlled book value pressure. We can just see from the mobile, on the way itself, I was reading it and seeing it just for chance. How can the book value be below 400 for FY24? So I would like to do play for here and now, because bank analysts will just prepare the reports for the evening and kick it off. or maybe tomorrow morning, and I wonder how different ones will calculate. But they need not take from this slide. It's very, very important. Next is we mentioned about this resolution for 30,000 crores. It is, I wonder if it is enabling or all the banks now are raising money, huge money is coming, private banks and public sector banks. Almost all public sector banks are raising money. Even the private ones, they are going for expected raising of UAPs and all. So what is the thought process on it? Are we going to raise money, equity seriously? Because we don't require as far as capital education. And often this has an impact on... And it should be at the right price. So your thought process, it's only enabling. We are looking at it seriously. And, of course, the bank, what steps the bank will take to ensure it's at the right valuation. And with this, all the best. I hope particularly as some point was discussed, this year what is coming now comes often, we say once in 10 years, treasury income, there will be a lot of opportunities for a treasury team, and I hope they are agile as usual. and to see that we will break records in terms of net profit. Also, I want to refer you to us on macro net profits, especially for contribution by the treasury team. Thanks, and wish you all the best for the coming year. Look forward to the detailed reply to the question which you always do as usual. Thanks. Thank you very much, and my name is Ramayana. Thank you. So four questions, three questions and one observation. We hope that it will continue to perform well. And the problem is I request Mr. Mohan to respond. I have a question and I will supplement after his response. Similarly, I request our team who is sitting in the audience to clarify their position. I will start with my response to this resolution related to, it's not 35,000 crores, it's 25,000 crores. And it means resolution for it needs to be raised. This resolution of the value note is that every year we take this and our effort is to balance over both requirements and also the need for augmenting the CG1 capital. You're right. Today, we don't need good capital. We mentioned all that. We have enough firepower to cover late-life payment costs. So we don't need immediate key in terms of the CRA requirement for coming court.

But we still feel that if there is an opportunity today, we could be capital.

But we will look for an opportune moment. And we always in the beginning of the year, we take enabling resolution so that we have an ample time to plan our equity raising if needed. And the foreign officers, Ram, you can respond. On the IBG side, I think your observation is correct. We grew at a faster cliff. Traditionally, we have the ability to play a complementary role to domestic. So whenever we feel like the domestic growth is slightly lower, we can always ramp up the IBC growth or the international banking growth. Because we use the three levers evenly, like we have exposures to trade finance, we have exposure to the local corporates, whether in US or UK, etc. Well-rated corporates, most of them are listed entities and debt is also available in the market, we can always pick up. And of course, we also cater to the larger Indian companies which want to rise ECBs. In fact if you see like traditionally all the three components are equally balanced 33%, 34% we had a slight uptick in India linked loans where second half of last year we have seen a higher demand from the Indian corporates for rising ECBs because of the cost arbitrage. Even on a fully rated basis their cost was slight better rated companies they had a cost advantage as compared to rupee lending. So this is very, I mean, we are always looking at the opportunity. Whenever there is a need, we can ramp up, or whenever we don't need, we can ramp down. That is the ability of the IVC portfolio. Yeah, so in terms of the local credit, what do you see here? It is predominantly coming from the markets in US. And a little bit on Bahrain. Bahrain, of course, is not local credit, but across the UAE and other jurisdictions. But local credit is – the India-related is essentially ECB, external commercial borrowings. We park those assets in the branches where the advantage of cost of funds is there. We are also extensively using the gift city now because of the tax benefits as well as gift city's ability to raise resources also has improved. So predominantly the local loans are in the U.S. and ECBs are in the gift city, Hong Kong and DIFC Dubai. These are the jurisdictions where we park the ECBs. Anything else we left out? Bookwell is most important. Price of bookwell, yes. And the direction.

So how we have calculated is the net, first of all it is for standalone banking business. And the net worth divided by number of shares, that's how we calculate. And the net worth is 3,89,071. And the number of shares is 892.46. That is how we have arrived at 435.95. Also, this is also adjusted for the revaluation reserves. That is the methodology that we have brought.

Can we mention standalone and console and also see how money control does it? Because the customer or the viewer stakeholder looks at this database like money control, there are many others.

But this result is for SBI. Control is only on the last page. Yes. Rest is all about SBI. Yes.

So that book value is not there. I calculated it myself, which is much higher.

Yeah, of course.

And even the money control needs to be updated. So when we take a comparative one.

We can do that.

We'll engage with them. Yeah. Thank you. Yeah, he has even seen that this is a large quarter.

Hi, sir. This is Nitin Agrawal here from Motilal. Sir, I have a few questions. One is again on the OPEX part. If you look at the overheads also this quarter, we talked about the staff costs, but even the overheads, if you look at the miscellaneous number, that has more than doubled YOY. So anything specific that has caused this increase? And related to this, now that the bond yields have come off, do you think that there is a risk on the pension provisioning that we may need to make to beef up the plan assets?

So on the overheads, see there are three performance linked payouts which we make to the staff. The primary performance linked initiative is, the incentive is, the industry agreed upon incentive, that is 15 days pay once we reach certain levels of operating profit. So that is generally shown in the staff expenses. There are two other PLIs, one is where 1% of our profit we allocate to the performance linked incentive based on the grid related, in the sense AAA, AA and all these things. That also is shown in the staff expenses. The third element which has come now from this year would be a PLI scheme introduced from the scale 4 and above, chief manager and above. which is not 15 days space as agreed on industry basis. It is specific to the chief manager and above grade. That PLI is payable On approval of the government. That expenditure. We have shown under the overheads. It could have been shown under staff provisions. But since it is not to be booked. And we have shown. Please correct me if I am. So that is also appearing in the overheads. Which is showing the jump in the overheads. Otherwise. This element of PLI. We could have taken in the first quarter also. But since we know broadly. That what could be the expenditure. And our assessment shows that the bank is qualifying for the PLI, even as per the Government of India, you know, scheme. That is how the overheads have got elevated.

Right. Okay. And second question, sir, is on the Bhushan Power and Steel. Now, in light of the Supreme Court judgment, how are we looking at the impact on the banks and what is the impact on SBI from that? Any color around that will be helpful, sir.

Nitin, you know our stance, we don't comment on the individual accounts. So I restrain in terms of the impact. But I can tell you that we are studying the order. Obviously, the councils for the lenders and councils for the company, councils for the RP, we all will sit together and see the impact of this order. and what could be the potential options available to us. Beyond that we will not be able to comment on this. Thank you.

Okay, sure sir. And third question sir is on the NARCL sale because now that the RBI has allowed the SR provisioning right back and we have availed some of that in this quarter. So are we looking at a more like higher number of sale this year and what could be the potential right back that we may see in FI26?

Our transfer to NER still was never guided by what is happening on the provisions. I think RBI clarification is more in terms of the differentiated approach towards the SRs guaranteed by the government of India. Otherwise, any SRs which we get where asset is fully provided, we normally carry that SRs at the rupee, one rupee value. But here, the situation was different because SRs are guaranteed by government of India and RBI has taken a decision that if it is backed by government guarantee, you can have a differentiated approach and if you are showing at 1 rupee value, please you have an option of revaluing those SRs. So that is how the revaluation has happened and you can see that gains also in the treasury side. So I don't think either it will depress or it will increase the movement to the NARCL. The transfer to the NARCL so far have been significant. It is more than 1.06 lakh. 1,50,000 gross worth loans have been transferred to NARCL already. So which means that this enabling provision was not there despite that the transfers have happened. It will be purely based on what is the right strategy for resolving an account. If we think that aggregating the bad debt into NARCL for a better resolution, I think the asset will move there.

Right, sir. And, sir, lastly on the ROA wherein you have like in the earlier quarters mentioned that the SBI will look to maintain 1% plus ROA. Now that the RBI is cutting rates and there is a possibility of more repo rate cuts which may impact margins, how confident do we feel to maintain 1% plus ROA? Any risk do you see emerging on that front?

I think we still will be able to maintain 1% ROE. How quickly the further rate cuts will happen will determine on the net interest margins. There would be some realignment of the rates on the deposits because without that the effective monetary transmission will not happen particularly because significant loans which are linked to the MCLR. Correct? So MCLR readjustment will happen only when the incremental cost of deposits will come down. So we will ensure that the readjustment of interest rates and the deposits are aligned at least broadly with the repo rate cards so that the margin protection is there. But I am unable to tell you when will it happen, how deep will be the rate cards. So Broadly, on an annual basis, we may have some quarters where there will be much more pressure on the NIMS and impact on the ROEA. But broadly, we are sticking to our guidance on 1%. Sure, sir. Thank you so much. I wish you all the best.

Hi, sir. This is Bhavik from Ingrid Capital. Sir, three questions. First on savings rate, deposit rate. So we saw large private banks cut 25 basis point. So what would be our stance in the immediate near term and maybe if RBI were to cut repo rates by 100 basis point, then would we still maintain the 25 basis point delta versus large private banks in our SAR rate cuts? Second question, sir, we saw very good recovery from runoff income this year. It was 80 billion last year, it was 70 billion odd. So, as in how confident are we that it will sustain for the next year and onwards and how many lumpy accounts are left in our recovery from TOO pool? Third question, sir, Staff cost was on a YOR basis was very good this year, partly because we had taken like stepped up provision last year on wage hike cycle, so on and so forth. Next year, AS15 provision will also come. So can we expect like mid-teens growth in staff cost next year or that will be too far a reach? So yeah, I'll stop there.

So on the savings bank interest rate, there's no plan to cut any further on the savings bank rate cut. I think we'll maintain at this rate while the ALCO will take a call on that. But broadly, I think we believe that the rate is stabilized at this level. Other banks have had higher rate, so they had the room to cut that savings bank. But as I mentioned, there will be some readjustment on the fixed rate, fixed deposit going forward. Recovery and return of accounts, we don't have any chinky accounts where the recoveries are coming from. It is broadly coming from the smaller accounts. And we have strengthened our recovery processes In fact, we brought back our stressed assets management regional offices. We used to have SAMROs, you know, to monitor the low value recoveries. And when the large scale NPS had to be, you know, resolved, we slightly reduced the focus on the regional offices. We have actually removed the regional offices. In the last two years, we brought back the regional offices. So there is a renewed focus in terms of the small value recoveries. That is what you are seeing. Much of this 2000 run rate per quarter is essentially coming from the retail loans and small value loans, both in the stretched asset group as well as in the retail banking group. So hopefully I think that run rate is expected to continue. Stab costs, any input from any stab costs?

So the staff expense has gone down from 71,237 to 64,352. Basically, the provisions for employees has come down by 36.86%, which is because of the provisions that we made last year for the bilateral wage settlement. And coming to salaries, on a YOY basis, the salary has increased just by 5%, and that too, the profit, the PLI has been taken into consideration, despite that the increase is just 5.79%. Provision for pension also came down because of the MTM gains we made on account of the yield movement. Gratuity has gone up by 40% but the amount is very minuscule. Other than that, I think no other numbers to call out. So from 25,860 this year, it has come to 16,301 as regards salary is concerned.

Thank you, ma'am. So last two questions. First, so we are still paying higher in the lower, shorter duration of buckets in the term deposits. So, when would we kind of realign with the other banks and now the system liquidity is good, so why as in are we still paying higher in the shorter term of buckets. Second sir, our CET1 ratio 10.8%, so out of that as in how much would be AFS reserve. So, in the revised investment guidelines, MTM gains on AFS is part of CET1. So, that's it sir and thank you so much sir for giving the opportunity.

So the interest rate will be re-looked in the ALCO, coming ALCO this month. So we will definitely look at all the tenors. You are right, I think most of the short-tenor higher rates are generally given in the last quarter just to ensure that the liquidity is available. But we will... And also when the interest rates are coming down, none of us want to lock in at a long ten hour interest rates. But we will review all of them in the ALCO. And what is the other one?

AFS Reserve, sir. Yeah, AFS Reserve. Can I respond? It is 6600.

Yeah. Hi, sir. This is Jai Mundra from ICICI Securities. Sir, question on your express credit growth, right? So the YOY growth has come down to almost less than 1%. The GNPA number that you show in that book is actually it has come down from 1.11 to 1.07%. So how do you look at the growth in this book? I think one or two quarters back we had said that we are looking for maybe early double digit kind of a growth there. How do you look at that book growth?

We are definitely seeing some uptick in the express credit. In fact Q4 we had a net growth of 5000 crores. This growth rate on the year on year looks smaller because the earlier quarters have been not so good on the express credit. There are two reasons. One is that we, as I mentioned in the last quarter also, we completely revamped the whole process of extending the express credit. We also looked at some of the lower segments of customers. Though they are salaried class, the leverage is going up there. But we are confident that the growth will come back for two reasons. One is the NMI, EMI profile of many of these lower end customers in the salaried class would definitely improve with the revised tax structure. So hopefully their credit profile will improve. And some of them whom we are either not lending or they are not borrowing will come back to the express credit. And the asset quality front, asset quality in the express credit has never been an issue. I think it's just moment of a few basis points. Otherwise, it is holding up very well. It is something what we are now have another potential area is that among the corporate salary package customers, The new customer acquisition in the last financial year was 6.5 lakh customers we have acquired under the corporate salary package. And as you know, most of the express credit is extended to corporate salary package customers who have salary accounts with us. So this 6.5 lakh new customer addition to the CSP also gives some amount of pipeline for the express credit.

Right and sir lastly on domestic NIMS right so if I look at full I mean this quarter the NIMS have been stable while I can see that the cost of deposit is still going up at least that is what is being shown in the presentation but on a full year basis sir I mean if I look at the beginning of the rate cycle FI 22 from there we have lost around 13-14 basis points margin on the domestic on the domestic book. So now the rate cuts, I think the first rate cut was Feb, in the early Feb and only let's say half of the quarter impact would have been there in fourth quarter. Now going ahead, I mean remaining half will come and then the second rate cut that was announced, that will come. How do you look at the overall NIM trajectory, sir?

First of all, I think there definitely will be pressure on the NIM. There is no denial of the fact. How much pressure will be there? The pressure will be relatively less on us because as we mentioned that our repo linked loans are only 29%. Our book either is predominantly MCLR linked or fixed rate loans. Almost 70% of that is MCLR plus fixed rate loans, 50%. And which means that the impact of any further rate cuts would take some time for us. But as I mentioned, there will be an imperative need to readjust the rates on the deposits. Obviously, the monetary transmission and NCLR impact will not be visible unless we readjust that. So the effort would be to protect the NEEM at 3% level. But there would be some quarters where we will have some pressure on the NEEM. I am not able to quantify immediately because we do not know how the rate cycle, while broadly we believe that there would be another 50 basis point rate cut, how quickly and how much is unknown at this point of time. But the fact that the NIMS will be under pressure is something which we recognize and we will see what kind of effort can be made in terms of adjusting the rate. rates both on the deposits and the loans.

So sir just lastly I mean if the NIMS were are under pressure credit cost remain very excellent right from 38 basis point full year you know they are as good as standard 6 provisioning only right so what will sort of a cushion ROA at around 1%.

Treasury gains? Ajwain Assam said that treasury should perform well. No, I'm not looking at the treasury as to heavy lift. But I think our focus is always on the core activities, how efficiently we run the core activities. But treasury is also a core activity for us because we run the largest treasury in the country. So obviously we have the potentials as well as downside risk on the surgery and we will have to play on that. Thank you, sir.

Yes, due to paucity of time, we will now take up few questions coming in through the online webcast which will be addressed by the chairman sir.

Yes, for other questions we are available offline, you can always reach out. So the online question, Abhishek Kumar Jain, what would impact of repo rate cut in NIM? I think I have broadly explained in detail. So, I am not going to repeat on this. Mayur from wealth managers, what is the outlook on cost to income? When will we start seeing benefits of operating leverage? plus digitization year after year, cost to income continue to raise. I think for a change we have shown better number on the cost to income ratio. Yes, I do agree that we have obviously have to take the leverage of digitalization which has happened. Just for data point, our alternate channels are performing extremely well today. 98% of the transactions are conducted through the alternate channels. Some channels are expensive, like ATM and customer service points, but digital channels are cheaper. So we are trying to see how the digital adoption will progress and bring the cost efficiencies. Our focus would be mainly on how do we increase the income while the cost decidities particularly on the employee side will remain. Staff expenses also moderated as we mentioned here and pension provisions are also decreased. But these are some of the costs. This from time to time will get elevated so our focus would be on increasing the operating income. So the guidance broadly is to keep it below 50 to 51% level. Punit Shukla, what is current status of bank customers as on date where we stand in customer base? We have more than 52.33 crore customers as on March 25th. Banchi Chawla from ID Bay Capital. Express credit segment has seen decline in credit growth. Outlook on the same I mentioned. I think we have acquired a good number of CSP customers providing a visibility on the express credit. And also we have seen a good growth in the Q4. So we hope to continue that. Kunal Shah, when do we expect to conclude equity fundraise and what would be the preferred route? Other provision reversal of 1600 crore, does this include any specific chunky corporate account provisioning? 3900 crores on government guarantees are reflected in profit and revaluation of investments. Forex income appears very volatile and has almost doubled. What is the normalized level? See, I think I answered the first thing. What is the normalized level of this income is very difficult to predict because The forex markets also play on the volatility. Forex income obviously was helped by the volatility in the market. Government guaranteed SR reflect in the profit, yes, 3900 crores, but at the part level it is about 2000 crores. Fund raised 25,000 crores, I told you that is an enabling provision, what we have taken, we will see what is the appropriate time to access the market. Abhinav Gundaluru, given the rapid evolution of AI technologies globally, can you share SBI strategic roadmap for AI adoption particularly in areas like credit risk assessment, fraud detection etc. and whether SBI envision AI playing a role in operational efficiency and growth. We strongly believe that if SBI has a growth rate of 10 to 11 percent on the balance sheet basis, which means that SBI gets doubled. I think this is my favorite story. I keep telling everyone that SBI gets doubled every six to seven years. And this cannot be handled. And we have doubled from 2018 to 2024 in our size. We were 30 lakh crores in 2018. We become 60 lakh crores in 2024. And we have not doubled our branches. We have not doubled our headcount. But we brought the efficiencies to the digitalization. And we strongly believe that the new age technologies like AI, we were the early adopters in banking sector in the predictive AI modeling. Our pre-approved personal loan, PAPL, was a big hit, which was based on the predictive AI. So we are also using the GenAI and the new emerging technologies. Broadly, initially we have used GenAI-based chatbot for disease claim settlement. This was one of the most irritating problem for the customers. When somebody dies in the family, how do you settle that account? And we have used the AI tools to expedite and simplify this process. We also have Gen-I powered Ask SBI. This we thought that is a good use case to give the tool. This is a repository of all the information, circulars, SOPs, policies in one go which is available to the employees. And the Gen-I tools are deployed. We call it now SPARC. where the employee not only searches for information, he is able to get a standard operating step-by-step procedures to handle a query. We are further fine-tuning this. I think the knowledge-based activities and fraud risk management, PRM tools are also being fine-tuned using the AI. I think a lot of use cases we are experimenting with hopefully will result in the productivity gains. Akshay Jain, can you explain the large sequential movement in miscellaneous non-interest income and miscellaneous expenses? Q on Q basis, miscellaneous income has increased by 80% mainly due to increase in dividend income of 1,645 crores. Expenses has increased by 110%. Major item is, as I mentioned, grade PLI provision of 1,300 crores per scale 4 and above. This is as per the Government of India PLI scheme. Rohan Mandora, your cumulative yield and advance for domestic business has increased in Q4. As per slide 23, we wanted to understand where we have taken yield hikes, given that there was a repo cut. In Q4, quarter-on-quarter basis, four basis point increase in the yield and advances is mainly an average advances level going up. There has been some uptake of benefit of the previous MCLR increases which took some time for to gain that and that is resulted in the 4 basis increase on the yield and advances. Provision for NPAs have been higher in Q4 as we mentioned. I think it is broadly because of the ageing provision. Fresh ripages provision is very modest. Kahul Koshi, what was the reason for large provisioning this quarter? I have already explained. Where is the government-backed SR provision reversal reflecting in P&L? The gross amount is getting reflected in the operating profit, 3875 crores and net profit increases 2900 crores. after adjustment of taxes, 975 crores. Raktim, our net interest income margin squeezing because of raising deposit costs, how bank is thinking? I think I have spent considerable time in explaining how the NIMS will be protected. I hope you are able to follow that and thank you very much for all of you. Thank you, Chairman, sir.

I trust all the questions.

Yeah. Please.

Yeah, Nitin Gandhi here. Within the diversified loan portfolio, if I see, other industry classification is almost 5.4 trillion. That has the highest growth of 22% as compared to any other industry. Something is unusual. Some color can you share on this? 22%? 22% growth in other industries.

Other industries?

It's 5.4 trillion of the portfolio.

So a lot of things which are not classified here, they all get into that other industries. But it's mainly coming from industries like data centers and all could not be put in anywhere. It doesn't fit in the real estate. So some of those items move in there. But it's a very diversified one. Maybe, you know, five, six major industries, you can give later to him. It's constituted in other industries.

And the second question is, can you share some thoughts on the sanctioned loan book? How is it behaving post-March? Sorry, come again. Sanctioned corporate loan book. You said that towards March, central PSUs and everybody reduced. But now how are they behaving? What is your expected disbursement coming over the next two, three quarters, if you can share some thoughts on that?

So we have good visibility on the corporate side, 1.7 lakh crores, which is sanctioned but not disbursed. much of that growth will come from that segment. So there's a visibility. We only hope that nobody again decides to deleverage and prepare the loans. But broadly, we are sticking to our 12% growth rate on the corporate side also. Thank you.

I think one thing which Chairman explained in the last quarter, many of the central PSUs got a lot of money from government. And with the clear instructions to pay all the lenders, which happened in our case, very, very large accounts were prepaid. So that brought down the capital book. Otherwise, till quarter three, the growth rate was pretty good. And we are not seeing this happen now because now the disbursements and the overall pipeline as Chairman has already said 3.4 trillion out of which half of it is sanctioned already. So we should see its consistent growth in this corporate book including the project finance. We are not seeing any other behavior which was seen in the quarter four last year at this point of time. Thank you. Thank you. Thank you very much.

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 sir, 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.