State Bank of India — Q4 FY25 earnings call

Call held 3 May 2025

Management summary

State Bank of India delivered a strong performance in Q4 FY25, with full-year net profit increasing by 16.08% to ₹70,901 crores. The bank achieved robust credit growth of 12% YoY, supported by healthy domestic advances and stellar asset quality metrics, including a low slippage ratio of 0.55%. Management reiterated its commitment to maintaining profitability and efficiency, while also outlining plans for capital raising and leveraging digital initiatives for future growth. Despite some moderation in credit growth expectations, the outlook remains positive with strategic focus on core activities and treasury gains.

Highlights

  • Net Profit for FY25 was ₹70,901 crores, up 16.08% YoY.

  • Whole Bank Credit Growth for FY25 was 12% YoY, with domestic credit growth at 11.56%.

  • Total Deposits for FY25 grew by 9.48% YoY to ₹53.82 trillion.

  • Slippage Ratio for FY25 was 0.55%, with retail personal slippage ratio at 0.48%.

  • Credit Cost for FY25 stood at 0.38%, and PCR was 74.42%.

  • Capital Adequacy Ratio for FY25 was 14.25%, and CET 1 ratio was 10.81%.

  • RoA for FY25 was greater than 1%, and RoE for FY25 was greater than 19%.

  • Board approved raising equity capital up to ₹25,000 crores, valid for 12 months.

  • Q4 net growth in Xpress credit was ₹5,600 crores.

  • Government-backed SR provision reversal contributed ₹3,875 crores to operating profit and increased net profit by ₹2,900 crores.

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 RoE over 15% through the business cycles.

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

  • Return on Assets (RoA) Profitability · future · Medium confidence 1%
    I think we still will be able to maintain 1% RoA.

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

Capital

  • Equity Capital Raise Capital · 12 months · High confidence up to ₹25,000 crores
    The board has granted approval to raise equity capital up to ₹25,000 cores, with the authorization being valid for a period of 12 months.

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

Credit Growth

  • Overall Credit Growth Credit Growth · next year/future · Medium confidence 12% to 13%

    Previously 14% to 16% → 12% to 13%

    while we are not saying that it would be 14% to 16%, but 12% to 13% is quite possible while the industry is growing less than 12%.

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

  • Corporate Loan Growth Credit Growth · future · Medium confidence 12%
    broadly, we are sticking to our 12% growth rate on the corporate side also.

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

Margin

  • Net Interest Margin (NIM) Margin · future · Medium confidence 3%
    The effort would be to protect the NIM at 3% level, but there would be some quarters where we will have some pressure on the NIM.

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

Efficiency

  • Cost to Income Ratio Efficiency · future · Medium confidence below 50% to 51% level
    So, the guidance broadly is to keep it below 50% to 51% level.

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

2 min read

Detailed narrative

State Bank of India concluded FY25 with a robust financial performance, reporting a net profit of ₹70,901 crores, marking a significant 16.08% increase year-over-year. The bank's total deposits grew by 9.48% YoY to ₹53.82 trillion, while whole bank credit expanded by 12% YoY, with domestic credit growth at 11.56%. This growth was broadly diversified, with SME advances growing by 16.86%, agriculture by 14.29%, corporate by 9%, and retail personal by 11.4%. Foreign offices also contributed with a 14.84% YoY advance growth, primarily from US markets and External Commercial Borrowings.

Asset quality remained a key strength, with the slippage ratio for FY25 at a low 0.55% and the retail personal slippage ratio even lower at 0.48%. The credit cost stood at 0.38%, and the provision coverage ratio (PCR) was healthy at 74.42%. The bank's capital adequacy ratio was 14.25%, with a CET 1 ratio of 10.81%, both well above regulatory requirements, providing sufficient headroom for future business growth. Management highlighted the consistent achievement of RoA greater than 1% and RoE greater than 19% for FY25, underscoring the bank's operational efficiency and scale.

Strategic initiatives included continued focus on digital banking, with over 8.77 crore customers registered on YONO, and 64% of new savings accounts opened digitally. The board also approved an enabling resolution to raise equity capital up to ₹25,000 crores over the next 12 months, though the timing would be contingent on market conditions. Explanations were provided for Q4 movements, including a significant increase in miscellaneous expenses due to a ₹1,300 crore PLI provision for higher-grade employees and a boost in operating profit from government-backed SR provision reversals, amounting to ₹3,875 crores gross and ₹2,900 crores net profit increase.

Looking ahead, management provided guidance on several key metrics. While the previous credit growth target of 14-16% was moderated, the bank now expects overall credit growth of 12-13%, with corporate loan growth specifically targeted at 12%. The Chairman reiterated the goal to consistently achieve RoE over 15% and maintain RoA at 1%. Despite anticipated pressure on Net Interest Margins (NIMs) due to potential rate cuts, the bank aims to protect NIMs at the 3% level, leveraging its predominantly MCLR-linked and fixed-rate loan book. The cost-to-income ratio is targeted to remain below 50-51%.

Concerns raised during the Q&A included the sequential increase in Q4 employee expenses and overheads, which management clarified were due to annual PLI provisions and other staff-related adjustments. The impact of a large account recovery and SR revaluation was also discussed, with specific figures provided for their contribution to NPA reduction and treasury income. The bank remains focused on strengthening its liability franchise, particularly current accounts, and leveraging digital adoption and AI technologies to drive operational efficiencies and sustained growth.

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