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.