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State Bank of India — Q3 FY24
SBI reported Q3 FY24 PAT of ₹9,164 crore, absorbing a one-time exceptional provision of ₹7,100 crore for pension and dearness relief.
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SBI reported Q3 FY24 PAT of ₹9,164 crore, absorbing a one-time exceptional provision of ₹7,100 crore for pension and dearness relief. Excluding this, PAT would have been significantly higher. The bank's asset quality improved further with gross NPA at 2.42% (lowest in a decade) and credit cost at 0.25%. Domestic loan growth was robust across segments: retail (+15% YoY), agri (+18%), SME (+19%), and corporate (+11%). Management guided for NIM stability (2-3 bps dip) and loan growth of 14-15% in line with nominal GDP. The bank expects ROE to exceed 20% going forward, aided by productivity gains and digital initiatives. A key risk is the elevated wage cost trajectory, though productivity improvements are expected to offset it.
SBI ने तीसरी तिमाही में 9,164 करोड़ रुपये का शुद्ध लाभ कमाया। इसमें पेंशन और महंगाई राहत के लिए 7,100 करोड़ रुपये का एक बार का खर्च शामिल है। इस खर्च को हटा दें तो मुनाफा और भी ज्यादा होता। बैंक के खराब कर्ज (NPA) का स्तर 2.42% पर आ गया है, जो 10 साल में सबसे कम है। कर्ज देने की लागत भी 0.25% पर बहुत कम है। देश में कर्ज की मांग अच्छी है - रिटेल (+15%), कृषि (+18%), छोटे कारोबार (+19%) और कंपनियों (+11%) में बढ़ोतरी हुई। बैंक का कहना है कि ब्याज दरों में गिरावट (2-3 आधार अंक) के बावजूद मुनाफा स्थिर रहेगा और कर्ज वृद्धि 14-15% रहेगी। आगे चलकर बैंक को 20% से ज्यादा रिटर्न (ROE) की उम्मीद है, जो डिजिटल सेवाओं और कामकाज में सुधार से मिलेगा। हालांकि, वेतन खर्च बढ़ने का जोखिम है, लेकिन उत्पादकता बढ़ाकर इसकी भरपाई की जाएगी।
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Elevated wage cost trajectory
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Gross NPA Ratio
2.42%
-72bps YoY
Lowest gross NPA in over a decade, reflecting sustained asset quality improvement.
Credit Cost (9M FY24)
0.25%
-12bps YoY
Credit cost improved 12 bps YoY, driven by strong underwriting and risk management.
ROE (9M FY24)
19.47%
+88bps YoY
ROE improved 88 bps YoY; management expects sustainable ROE above 20%.
Slippage Ratio (9M FY24)
0.67%
-5bps YoY
Slippage ratio improved 5 bps YoY, indicating better asset quality control.
What Changed vs Last Quarter
NEW
NIM to remain stable with 2-3 bps dip
Margins expected to be maintained around current levels, with a maximum dip of 2-3 bps.
NEW
ROE to exceed 20% going forward
Management expects ROE to sustainably exceed 20% as one-time provisions normalize and productivity improves.
NEW
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.
UPDATED
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
Domestic NIM to compress 3-5bps more then stabilize
Management expects domestic NIM to decline by another 3-5 basis points from current 3.43% and then stabilize around that level by year-end.
DROPPED
SME book target of INR 4 trillion by FY24
SME advances are expected to reach INR 4 trillion by FY24, driven by analytics-led products and improved infrastructure.
DROPPED
CET1 ratio expected above 11% by year-end
With profit plough-back, CET1 ratio is expected to improve to over 11% by March 2024, from current 9.94%.
NEW RISK
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.
NEW RISK
Capital adequacy pressure from growth
Strong loan growth may require capital raising if ROE does not outpace growth; management open to equity issuance.
NEW RISK
Uncertainty in NCLT recoveries
Recoveries from NCLT are unpredictable and depend on consortium decisions; no major lumpy recoveries expected.
RISK GONE
Potential RBI risk weight increase on unsecured loans
RBI may increase risk weights on small-ticket unsecured loans (below INR 50,000), which could impact capital requirements, though SBI's exposure is minimal.
RISK GONE
Wage revision cost overrun
If wage settlement exceeds the assumed 14%, additional monthly cost of ~INR 100 crore per 1% increase could pressure operating expenses.
RISK GONE
Geopolitical risks impacting overseas book
Global uncertainties and Middle East conflict could affect the international loan book, though management is focusing on stable geographies.
🤫 Topics management stopped discussing
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.
Fast read
Guidance and risk preview
Management expects credit growth to be in line with nominal GDP plus 3-4%, targeting 14-15% for FY24.
Staff costs remain high due to wage revision and pension liabilities; management expects productivity gains to offset but execution risk exists.
View Risks →