• Net Profit: INR16,891 crores, up 84% year-on-year.
• Whole Bank Credit Growth: 13.49% year-on-year.
• Domestic Credit Growth: 14.06% year-on-year.
• CD Ratio: 68.94%.
• Slippage Ratio: 0.39%.
• Retail Personal Slippage Ratio: 0.32%.
• Credit Cost: 0.24%.
• PCR (Provision Coverage Ratio): 74.66%.
• Total Deposits Growth: 9.81% year-on-year to INR52.29 trillion.
• Term Deposits Growth: 13.47% year-on-year.
• Current Account Deposits Growth: 14.22% year-on-year.
• CASA Growth: 4.46% year-on-year with a CASA ratio of 39.2%.
• Domestic Advances Growth: 14.06% year-on-year.
• SME Growth: Over 18%.
• Agriculture Growth: 15%.
• Corporate Growth: 15%.
• Retail Personal Segment Growth: 11.6%.
• Foreign Offices Advances Growth: 10.35% year-on-year.
• Net NPA Ratio: Improved by 11 basis points year-on-year to 0.53%.
• Capital Adequacy Ratio (CAR): 13.03% without considering clawback of profits; 14.5% including profits for nine months.
• CET1 Ratio: 10.99% including profits for nine months.
• ROA (Return on Assets): Greater than 1%.
• ROE (Return on Equity): Greater than 20%.
• Total Assets: INR66.1 lakh crores.
• Total Advances: INR40.68 lakh crores.
• Total Deposits: INR52.29 lakh crores.

• Warning! GuruFocus has detected 1 Warning Sign with SBKFF.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• State Bank of India (SBKFF) reported a significant year-on-year net profit increase of 84% for Q3 FY25, reaching INR16,891 crores.
• The bank maintained a strong asset quality with a slippage ratio of 0.39% and a credit cost of 0.24%, indicating robust risk management.
• Domestic credit growth was strong at 14.06% year-on-year, with notable growth in SME (18%), agriculture (15%), and corporate (15%) segments.
• The bank's digital banking platform, YONO, saw substantial engagement, with over 8.5 crore customers registered and 64% of regular savings accounts opened through it in Q3 FY25.
• State Bank of India (SBKFF) achieved a healthy capital adequacy ratio of 13.03%, which would increase to 14.5% when including profits for nine months, indicating a strong capital position.

Negative Points

• Operating profit decreased significantly from INR29,294 crore in the previous quarter to INR23,551 crore, primarily due to trading losses and Forex losses.
• The bank's margins dropped by 13 basis points sequentially, driven by increased cost of deposits and lower treasury gains.
• There was a slowdown in the growth of express credit, with GNPAs in this segment increasing from 0.77% in March '24 to 1.11% as of Q3 FY25.
• The SMA-2 numbers increased substantially to INR7,424 crores from INR1,840 crores, although this was attributed to one major account that has since been regularized.
• The bank's cost of resources increased, impacting margins, and there is a concern about maintaining deposit growth without engaging in a rate war.

Q & A Highlights

Q: The operating profit has decreased significantly from INR29,294 crore to INR23,551 crore due to trading losses and Forex loss. What are the plans to recover this in the next quarter? A: Challa Setty, Managing Director, explained that the decrease was due to MTM losses and increased cost of resources. The bank is focusing on increasing high-quality savings accounts and expects to maintain the credit growth guidance of 14%-16% and deposit growth of 10%.

Q: With the recent budget changes increasing MSME limits, do you see growth opportunities in this sector? A: Vinay Tonse, Managing Director, noted that the changes will benefit the bank as some mid-corporates will now qualify as MSMEs, potentially increasing priority sector lending benefits. The bank has revamped its SME funding process to improve turnaround times.

Q: Margins have dropped by 13 basis points sequentially. What is causing this, and where do you see the cost of deposits stabilizing? A: Challa Setty stated that the yield on advances has been maintained, but the cost of resources, particularly deposits, has increased. The bank aims to keep NIM above 3% and is focusing on qualitative advances growth.

Q: There is a slowdown in express credit growth. Is this due to overleveraging concerns? A: Challa Setty clarified that the slowdown is due to a shift to digital lending processes and a general softening in unsecured credit. The bank expects express credit growth to return to double digits soon.

Q: What is the bank's approach towards AI and digital transformation? A: Challa Setty highlighted that SBI is focusing on enterprise-level AI with use cases in personalization, staff learning, and risk management. The bank has launched "Ask SBI" for staff to improve customer service and is working on a broader AI roadmap.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.