State Bank of India — Q3 FY25 earnings call

Call held 6 Feb 2025

Management summary

State Bank of India delivered a strong Q3 FY25 performance, reporting a net profit of ₹16,891 crores, an 84% increase year-over-year. The bank demonstrated robust credit growth across all segments, with whole bank credit growing 13.49% YoY and domestic credit at 14.06% YoY. Asset quality remained stellar, marked by a low slippage ratio of 0.39% and a net NPA ratio of 0.53%. Total deposits crossed ₹52.29 trillion, growing 9.81% YoY, while the bank maintained a healthy capital adequacy ratio.

Highlights

  • Net Profit: ₹16,891 crores, up 84% YoY.

  • Total Deposits: ₹52.29 trillion, up 9.81% YoY.

  • Whole Bank Credit Growth: 13.49% YoY.

  • Domestic Credit Growth: 14.06% YoY.

  • Slippage Ratio: 0.39%.

  • Credit Cost: 0.24%.

  • Net NPA Ratio: 0.53% (improved by 11 bps YoY).

  • Capital Adequacy Ratio (CAR): 13.03% (without 9M profits), 14.50% (with 9M profits).

What they filed

Q1 FY27: revenue up 8.4%, net profit up 13.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,21,045 1,24,654 1,26,840 1,25,729 1,28,040 +6%1,30,386 +5%1,31,080 +3%1,36,240 +8%
Net profit20,565 19,484 20,379 22,121 21,861 +6%22,176 +14%20,508 +1%25,121 +14%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Guidance & targets

Profitability

  • Return on Equity (RoE) Profitability · through the business cycles · High confidence over 15%
    From this strong position, our goal is to consistently achieve an RoE over 15% through the business cycles.

    — Mr. C S Setty, Chairman, State Bank of India

  • Net Interest Margin (NIM) Profitability · Ongoing · High confidence higher than 3%
    our guidance is that the NIM would be higher than 3%

    — Mr. C S Setty, Chairman, State Bank of India

  • Return on Assets (RoA) Profitability · Ongoing · High confidence 1%
    our guidance is that the NIM would be higher than 3%, and the ROE ROA will be 1% and more than 15% is the guidance we are sticking to.

    — Mr. C S Setty, Chairman, State Bank of India

  • Return on Equity (RoE) Profitability · Ongoing · High confidence more than 15%

    — Mr. C S Setty, Chairman, State Bank of India

  • NIM impact from 25 bps rate cut Profitability · Future (post rate cut) · High confidence not have more than 2-3 bps
    if it is a 25 bps rate cut, I think we will not have more than 2-3 bps.

    — Mr. C S Setty, Chairman, State Bank of India

  • Net Interest Margin (NIM) Profitability · Future · High confidence 3% above
    So the margins will stabilize, as I mentioned, 3% above.

    — Mr. C S Setty, Chairman, State Bank of India

Credit Growth

  • Whole Bank Credit Growth Credit Growth · FY25 · High confidence 14% to 16%
    our guidance in terms of the credit growth of 14% to 16% stands good.

    — Mr. C S Setty, Chairman, State Bank of India

  • Corporate Credit Growth Credit Growth · FY25 · High confidence upwards of 10% - 12%
    So, hopefully, the target which we had internally, of corporate credit, which is upwards of 10% - 12%, we'll be able to achieve that.

    — Mr. Ashwini Kumar Tewari, Managing Director (Corporate Banking & Subsidiaries), State Bank of India

  • Xpress Credit Growth (Unsecured Personal Loans) Credit Growth · Q4 FY25 or Q1 FY26 · Medium confidence double digits

    From single digits today

    we are hopeful that this Xpress credit growth rate, which is now in the single digits, will come back to double digits going forward, including this quarter we are expecting. If not, in the current quarter, definitely in the next quarter.

    — Mr. C S Setty, Chairman, State Bank of India

  • SME Loan Growth Rate Credit Growth · Ongoing · High confidence maintain this growth rate
    All these are, you know, we are confident that we'll be able to maintain this growth rate.

    — Mr. C S Setty, Chairman, State Bank of India

Deposit Growth

  • Deposit Growth Deposit Growth · FY25 · High confidence 10%

    Previously 11% to 12% → 10%

    deposit side we had originally given 11% to 12% guidance but last quarter we modified that guidance you know, going by what is happening in the market. We said that we would be happy if we reached 10%.

    — Mr. C S Setty, Chairman, State Bank of India

Deposit Mix

  • CASA Ratio Deposit Mix · Future (implied) · Medium confidence 40%
    the CASA ratio would come back to 40%.

    — Mr. C S Setty, Chairman, State Bank of India

Asset Quality

  • Credit Cost Asset Quality · through the cycles · High confidence 50 bps
    our guidance in credit cost of 50 bps holds good through the cycles.

    — Mr. C S Setty, Chairman, State Bank of India

Branch Network

  • New Branches Opened Annually Branch Network · every year · High confidence 500 to 600 branches
    We have 500 to 600 branches every year to be opened, especially in areas where our presence is not there, particularly in the new colonies which are coming up, our new conglomerates, metro, agglomerations which are happening, but we don't have the presence.

    — Mr. C S Setty, Chairman, State Bank of India

  • Total Branches Opened in FY25 Branch Network · FY25 · High confidence 400 for sure and maybe around 425 to 430
    And the plan is to touch 400 for sure and maybe around 425 to 430.

    — Mr. Vinay M Tonse, Managing Director (Retail Business and Operations), State Bank of India

2 min read

Detailed narrative

State Bank of India reported a robust financial performance for Q3 FY25, with net profit soaring to ₹16,891 crores, marking an impressive 84% year-over-year increase. The bank's total deposits reached a significant ₹52.29 trillion, growing 9.81% YoY, while term deposits saw a 13.47% YoY increase. Current account deposits also demonstrated strong growth at 14.22% YoY, contributing to a CASA ratio of 39.20%. The bank's overall credit growth remained healthy, with whole bank credit expanding by 13.49% YoY and domestic credit by 14.06% YoY.

Segment-wise, domestic advances were driven by strong growth in SME (over 18% YoY), Agri (15% YoY), Corporate (15% YoY), and Retail personal segments (11.6% YoY). The bank maintained stellar asset quality, with a low slippage ratio of 0.39% and a retail personal slippage ratio of 0.32%. The net NPA ratio improved by 11 bps YoY to 0.53%, supported by a robust provision coverage ratio (PCR) of 75%. Capital adequacy remained strong, with a CAR of 13.03% (excluding 9M profits), projected to reach 14.50% including 9M profits, and a CET-1 ratio of 10.99%.

Management reiterated its guidance for credit growth at 14-16% for FY25, while revising deposit growth guidance to 10% from the earlier 11-12%. They expressed confidence in maintaining NIMs above 3% and achieving an RoA of 1% and RoE over 15% through business cycles. The bank is actively focusing on increasing its CASA ratio back to 40% and expects Xpress credit growth to return to double digits in the coming quarters. Strategic initiatives include opening 500-600 new branches annually, with 400-430 planned for FY25, and leveraging digital banking platforms like YONO, which now serves over 8.5 crore customers.

During the Q&A, management addressed concerns regarding a sequential drop in operating profit, attributing it primarily to MTM losses on treasury gains and increased cost of resources. They clarified that forex-related income was impacted by MTM losses and derivative transactions due to USD-INR rate appreciation. The increase in SMA2 numbers was explained by a single large account that has since been regularized. Management also highlighted the positive impact of budget proposals on SME and agriculture segments, along with the estimated three-times consumption multiplier from tax rebates.

The bank's approach to AI, including the launch of 'Ask SBI' for staff and a broader AI roadmap, was discussed as a key strategic initiative for efficiency and customer service. Despite the competitive market, SBI remains focused on qualitative advances growth and disciplined resource management. The management's overall tone was bullish, emphasizing sustained performance, strategic improvements, and a strong pipeline for future growth, particularly in corporate and SME segments.

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