MUMBAI: The nation’s largest lender State Bank of India has reported record quarterly and annual profit numbers with a 24 percent growth in the March quarter earnings at Rs 20,698 crore—the highest in the entire India Inc including that of the otherwise most-profitable Reliance Industries, while annual profit peaked at Rs 61,077 crore.
At Rs 20,698 crore, SBI’s March quarter net income is much higher than that of the consolidated numbers of Reliance, which for decades has been the most profitable firm in the country.
RIL’s Q4 net income came in Rs 18,951 crore, down from Rs 19,299 crore a year ago. But in terms of annual earnings, Reliance still tops the chart with Rs 69,621 crore in consolidated earnings, while SBI’s is lower at Rs 61,077 crore.
As against this, the largest software exporter TCS reported only around 60 percent of SBI’s at Rs 12,434 crore for the March quarter which was a growth of 9 percent on-year.
Even from revenue from operations side, SBI leads the entire corporate by a wide margin with an annual revenue of Rs 1.11 trillion, up a full 19 percent from Rs 92,951 crore it had reported a year ago.
Announcing the numbers at his headquarters, SBI chairman Dinesh Kumar Khara told reporters that both the numbers are the highest ever for the bank and this was driven by a record improvement in the asset quality with gross bad loan piles falling to a decadal low of 2.24 percent down 54 bps from 2.78 percent last year, while net NPA printed in at 0.57 percent compared to 0.67 percent last year.
He also said the net income for the quarter would have been higher by Rs 7,100 crore had it not been for the additional provision it has made towards pension liabilities after the new wage pact came into force, towards which it had already provided for around Rs 13,500 crore.
“At 2.24 percent, our gross NPA is lowest in the past 10 years, Khara said, adding in absolute terms the gross bad loan pile came down by 7.32 percentage points to Rs 84,276 crore from Rs 90,928 crore while net NPAs came down by 1.94 percentage points to Rs 21,051 crore from Rs 21,467 crore.
The lender declared a dividend of Rs 13.7o/share for FY24 and the SBI counter closed at Rs ,819.65, up 1.14 percent on a day when the market gauge tanked 1.6 percent.
Khara said the March loan growth was one of the best growth in over eight quarters at over 16 percent and he expects the same trend to continue in FY25.
"Credit growth has been robust across all segments. RAM (retail and rural and medium companies) book crossed the Rs 20 trillion mark in FY24 while corporate segment grew at a healthy 16 percent. And we are sitting on Rs 4 trillion worth of corporate loans sanctioned now,” he said.
Going forward, Khara expects to sustain a similar credit and deposit growth rates of 15-16 and 13-14 percent respectively. “We’ll be able to maintain a credit growth trajectory of 15-16 percent that we had in FY24. Deposit growth would be around 13-14 percent," said Khara.
Total credit growth printed in at 15.24 percent while domestic advances grew 16.26 percent, corporate advances and agri advances crossed Rs 11 trillion and Rs 3 trillion-marks, respectively," he said, adding the bank also saw an impressive 36-quarter low in terms of ratios between gross and net NPAs.
In Q4, total income rose to Rs 1.28 trillion from Rs 1.06 trillion a year ago, while operating expenses grew 20 percent to Rs 30,276 crore from Rs 29,732 crore.
After salaries, the bank said the biggest expenses head is IT spends but did not quality it saying that is not their policy.
All that the chairman said was SBI is the largest IT spender among banks and is above the industry average of 6-8 but did not put a number to it. Private banks have been voluntarily sharing numbers in this quarter as the earnings season has come on the heels of the RBI ban on Kotak for its poor IT infra.
The overall provisions nearly halved to Rs 1,609 crore from Rs 3,315 crore in the year-ago period, Salony Narayan, the deputy managing director and the head of the finance department said.
On the RBI draft on provisioning against infra projects, Khara said, "incremental provisions will not be significant. We’ll be able to absorb and if this becomes a reality, we’ll be looking at repricing the loan. And the project loan book stood at Rs 1.21 trillion.
On the gold loan portfolio, Khara said, even before the finance ministry directive to review the asset quality of the Rs 1.3 trillion book, he said they have completed the same and there is nothing to worry about it as the bad loan ratio here is only 0.16 percent.
Khara said the bank is sitting on an excess liquidity of Rs 3.5 trillion which is parked in government securities now and an additional Rs 67500 crore in the held to maturity securities.
On hiring, the bank said they are already in the process to hire around 12,000 employees, of which over 85 percent recruits are engineers. The bank saw over 27,000 employees retiring last fiscal and the chairman said as a policy it replaces only about 75 percent of retirees per annum as a policy.