Profit for the fiscal year ended March 2024 was also at an all-time high – of ₹61,077 crore – and climbed 22%.
Unlike last quarter, the bank did not have to make any provisions for revision of wages and pensions. The Mumbai-based bank has kept a ₹1,700-crore buffer for any future pension needs.
SBI Forecasts 14-16% Credit Growth
Chairman Dinesh Khara said he expects credit growth in the 14-16% range in FY25.”We are also conscious of areas of further improvement. On the liability side we continue to focus on improving our share of current accounts while maintaining our leadership position in savings deposits. The cost base of the bank is high… but we aim to reduce our cost to income ratio by focussing on the income side,” Khara said.Loans at India’s biggest mass lender increased 15% year on year, led by a 16% growth in domestic advances. Retail loan growth was slightly slower at 15% as the bank was cautious on unsecured personal loans due to the increase in risk weights by the Reserve Bank of India (RBI), Khara said.Net interest income (NII) growth was, however, tepid at 3% year on year, reflecting the pressure of higher cost of deposits. Net interest margin (NIM), or the difference between the yield earned on loans and that paid for deposits, dropped to 3.47% from 3.84% a year earlier. Khara said with deposit growth near peak and credit growth strong, he expects the bank to maintain margins at current levels.
A 24% growth in non-interest income also supported profits. Non-interest income increased due the profit from sale of some investments. Fee income remained firm mainly due to levies earned from processing loan applications, Khara said.
Asset quality improved with net NPAs down to 0.57% from 0.67% a year ago. SBI, however, increased NPA provisions by one-and-a-half times to Rs 3,294 crore, which Khara said reflected an increase in standard asset provisions due to the rise in the bank’s loan book.
“The RBI guidelines on infrastructure provisions and also on expected credit losses are still in the draft stage, so the regulator is still taking feedback and analysing the scenarios,” Khara said. “It is hence too early to comment on these norms. But SBI is capable of handling any increase in provisions. We can also revisit pricing on loans based on these norms.”
Fresh slippages fell to Rs 3,967 crore in March 2024, from Rs 4,980 crore in December 2023.
Khara said the bank is open to raising equity capital but is in no hurry to do so because the current 14.28% capital adequacy is enough to expand the bank’s loan book by another Rs 7 lakh crore.
“We have a Rs 4 lakh crore pipeline of corporate loans, 75% of which is from the private sector. We are seeing demand from sectors like batteries, electric vehicles, semiconductor and battery storage, besides the traditional infrastructure and renewables,” Khara said.
The bank has seen utilisation of working capital loans increase to 61% from 51% earlier and term loan limits are at 18%, which indicate that demand for credit remains strong, Khara said.
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