Domestic Advances Growth
15.55%
+15.55% YoY
Domestic advances grew 15.55% YoY, driven by retail, agri, and SME segments.
SBIN
Diversified
03 Aug 2024
Sbin Ltd — Q1 FY25
SBI reported a modest 0.9% YoY PAT growth to INR 17,035 crore in Q1 FY25, with operating profit up 4.55% to INR 26,449 crore.
Financial stats pending filing verification
2-Minute Summary
✦ AI-Generated from Full Transcript
SBI reported a modest 0.9% YoY PAT growth to INR 17,035 crore in Q1 FY25, with operating profit up 4.55% to INR 26,449 crore. Domestic advances grew 15.55% YoY, while deposits grew only 8.18%, widening the gap. Net interest income rose 5.71% YoY, but NIM compressed 11 bps due to deposit cost pressures. Asset quality improved with gross NPA at 2.21% (down 55 bps YoY), though slippages ticked up to INR 7,900 crore, partly seasonal. The cost-to-income ratio improved 95 bps to 49.42%. Management guided for NIM stability within ±10 bps and credit cost around 0.50%. Key risks include deposit growth lagging credit, potential ECL provision impact, and elevated slippages in unsecured retail. The bank's strong capital position (CET1 10.25%) and excess SLR of INR 3.7 trillion provide buffers.
SBI ने पहली तिमाही (अप्रैल-जून 2024) में अपना मुनाफा 0.9% बढ़ाकर 17,035 करोड़ रुपये किया। परिचालन मुनाफा 4.55% बढ़कर 26,449 करोड़ रुपये रहा। बैंक ने लोन 15.55% बढ़ाए, लेकिन जमा सिर्फ 8.18% बढ़ी, जिससे अंतर बढ़ा है। ब्याज आय 5.71% बढ़ी, लेकिन जमा पर ज्यादा ब्याज देने से मुनाफे का मार्जिन थोड़ा कम हुआ। खराब लोन (NPA) घटकर 2.21% रह गया, जो पिछले साल से 0.55% कम है। हालांकि, कुछ नए खराब लोन 7,900 करोड़ रुपये आए, जो मौसमी है। बैंक का खर्च कम हुआ और पूंजी मजबूत है। आगे मार्जिन स्थिर रहने और खराब लोन पर खर्च 0.50% रहने का अनुमान है। जमा से ज्यादा लोन बढ़ना और छोटे कर्जों में बढ़ोतरी जोखिम है, लेकिन बैंक के पास 3.7 लाख करोड़ रुपये का अतिरिक्त सुरक्षित निवेश है।
Key Numbers
Gross NPA Ratio
2.21%
-55 bps YoY
Gross NPA ratio improved to 2.21%, the lowest in over a decade.
Cost-to-Income Ratio
49.42%
-95 bps YoY
Cost-to-income ratio improved 95 bps YoY to 49.42%, aided by lower operating expenses.
Slippage Ratio
0.84%
-10 bps YoY
Slippage ratio improved to 0.84%, though absolute slippages rose to INR 7,900 crore.
What Changed vs Last Quarter
NEW
Credit cost guidance of ~0.50%
Sustainable credit cost expected to be around 0.50% going forward.
NEW
CD ratio target of 70-72%
Credit-deposit ratio expected to be around 70%, potentially rising to 72%.
NEW
Capital raise of INR 25,000 crore approved
Board approved raising INR 10,000 crore Tier 1 and INR 15,000 crore Tier 2 capital.
UPDATED
NIM to remain stable within ±10 bps
Management expects net interest margin to stay near current levels, with variation not exceeding 10 bps.
DROPPED
Loan growth of 14-15% for FY24
Management expects credit growth to be in line with nominal GDP plus 3-4%, targeting 14-15% for FY24.
DROPPED
ROE to exceed 20% going forward
Management expects ROE to sustainably exceed 20% as one-time provisions normalize and productivity improves.
DROPPED
CET1 to get 50 bps boost from investment valuation norms
Revised valuation norms from April 2024 are expected to add ~50 bps to CET1 ratio.
NEW RISK
Deposit growth lagging credit growth
Deposit growth of 8.18% YoY trails credit growth of 15.55%, potentially pressuring liquidity and NIM.
NEW RISK
Elevated slippages in unsecured retail
Slippages in personal loans rose due to delayed salary credits in some states; though partly reversed, trend bears watching.
NEW RISK
Potential ECL provision impact
RBI's expected credit loss norms remain a consultation paper; management deflected quantification, citing it's premature.
NEW RISK
Regulatory scrutiny on CD ratio
RBI flagged loan growth exceeding deposit growth; management expects self-regulation but impact on growth is uncertain.
RISK GONE
Elevated wage cost trajectory
Staff costs remain high due to wage revision and pension liabilities; management expects productivity gains to offset but execution risk exists.
RISK GONE
NIM compression from deposit repricing
Deposit repricing at higher rates has pressured NIM; further compression could occur if competition intensifies.
RISK GONE
Capital adequacy pressure from growth
Strong loan growth may require capital raising if ROE does not outpace growth; management open to equity issuance.
RISK GONE
Uncertainty in NCLT recoveries
Recoveries from NCLT are unpredictable and depend on consortium decisions; no major lumpy recoveries expected.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24, Q3 FY24
Deposit repricing at higher rates has pressured NIM; further compression could occur if competition intensifies.
Mentioned in Q1 FY24, Q2 FY24
If wage settlement exceeds the assumed 14%, additional monthly cost of ~INR 100 crore per 1% increase could pressure operating expenses.
Management Guidance
NIM to remain stable within ±10 bps
Management expects net interest margin to stay near current levels, with variation not exceeding 10 bps.
Management guidance marginsCredit cost guidance of ~0.50%
Sustainable credit cost expected to be around 0.50% going forward.
Management guidance marginsCD ratio target of 70-72%
Credit-deposit ratio expected to be around 70%, potentially rising to 72%.
Management guidance growthCapital raise of INR 25,000 crore approved
Board approved raising INR 10,000 crore Tier 1 and INR 15,000 crore Tier 2 capital.
Management guidance capexKey Risks
Deposit growth lagging credit growth
Deposit growth of 8.18% YoY trails credit growth of 15.55%, potentially pressuring liquidity and NIM.
high · management_commentaryElevated slippages in unsecured retail
Slippages in personal loans rose due to delayed salary credits in some states; though partly reversed, trend bears watching.
medium · analyst_questionPotential ECL provision impact
RBI's expected credit loss norms remain a consultation paper; management deflected quantification, citing it's premature.
medium · analyst_questionRegulatory scrutiny on CD ratio
RBI flagged loan growth exceeding deposit growth; management expects self-regulation but impact on growth is uncertain.
low · analyst_questionNotable Quotes
Our effort and endeavor is to keep it at this level. I don't think it should have any significant change in the numbers.
We have plowed back about INR 1.14 trillion in the last three years. So that is something which is giving us the natural lever for growth.
I would be more than happy to grab the deposit provided the deposit is available at a cost which I would like to bear.
Frequently Asked Questions
What was Sbin's revenue in Q1 FY25?
Sbin reported revenue of — in Q1 FY25, representing a — change compared to the same quarter last year.
What guidance did Sbin management give for FY26?
NIM to remain stable within ±10 bps: Management expects net interest margin to stay near current levels, with variation not exceeding 10 bps. Credit cost guidance of ~0.50%: Sustainable credit cost expected to be around 0.50% going forward. CD ratio target of 70-72%: Credit-deposit ratio expected to be around 70%, potentially rising to 72%. Capital raise of INR 25,000 crore approved: Board approved raising INR 10,000 crore Tier 1 and INR 15,000 crore Tier 2 capital.
What are the key risks for Sbin in FY26?
Key risks include Deposit growth lagging credit growth — Deposit growth of 8.18% YoY trails credit growth of 15.55%, potentially pressuring liquidity and NIM.; Elevated slippages in unsecured retail — Slippages in personal loans rose due to delayed salary credits in some states; though partly reversed, trend bears watching.; Potential ECL provision impact — RBI's expected credit loss norms remain a consultation paper; management deflected quantification, citing it's premature.; Regulatory scrutiny on CD ratio — RBI flagged loan growth exceeding deposit growth; management expects self-regulation but impact on growth is uncertain..
Did Sbin meet its previous quarter's guidance?
Of 4 tracked promises, management 0 met, 0 close, 4 missed.
Where can I read the full Sbin Q1 FY25 concall transcript?
The full earnings conference call transcript or source release is available on the linked source material. This page provides an AI-generated summary with filing verification status shown on the financial stats.