State Bank of India (SBIN) Q1 2027 Earnings Call Transcript

Yes, I guess.

Good evening, ladies and gentlemen.

I am Pawan Kumar, General Manager, Performance Planning and Review Department of the Bank. On behalf of the State Bank of India, I am delighted to welcome the analysts, investors, colleagues, and everyone present here today on the occasion of the declaration of the Quarter 1 Financial Year 27 results of the bank. I also extend a very warm welcome to all the people who are assessing the event through our live webcast. We have with us on the stage our Chairman Sir, Sri CSAT, our Managing Director Corporate Banking and Subsidiaries, Sri Ashwini Kumar Tiwari, our Managing Director International Banking, Global Markets and Technology, Sri Rana Ashdosh Kumar Singh, our Managing Director Our Managing Director, Retail Business and Operations, Sri Ram Mohan Rao Amara. Our Managing Director, Risk Compliance and Saji, Sri Ravi Ranjan. Our Deputy Managing Director, Finals, Sri A.S. Paul. Our Deputy Managing Directors heading various verticals and Managing Directors of our subsidiaries are seated in the front rows of this hall. We are also joined by Chief General Managers of different verticals, business groups, Chief General Managers, and other senior officials of the circles, and various offices are connected to our live webcast. To carry forward the proceedings, I request our Chairman Sir to give a summary of the Bank's quarter work, financial year 27 performance, and the strategic initiatives undertaken. We shall thereafter straightaway go to the question and answer session. However, before I request Chairman Sir, I would like to read out the Safe Hour Statement. Certain statements in today's presentation may be forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual outcomes may differ materially from those included in these statements due to a variety of factors. Thank you. Now, I would request Chairman, sir, for his opening remarks. Chairman, sir, please. Thank you, Pavan.

Good evening, ladies and gentlemen.

A very warm welcome to all of you, and thank you for joining us for today's analyst meet following the announcement of our financial results for the first quarter of FI27. We greatly value this interaction as it provides us with an opportunity to go beyond the reported numbers and discuss the strategic direction of the bank, the operating environment, and our priorities for sustaining growth over the medium and long term. The first quarter has unfolded against a global backdrop marked by geopolitical uncertainty, evolving trade dynamics, and continued volatility across commodity and financial markets. Despite these external challenges, the Indian economy has continued to demonstrate remarkable resilience supported by strong domestic demand, healthy investment activity, robust services growth, and a well-capitalized banking system. Credit demand has remained healthy across key sectors, and we continue to see broad-based opportunities for sustainable growth. As India's largest bank, our approach has always been to continuously evolve while balancing growth with resilience. As we continue to revisit and transform our internal operations, we have further simplified several customer-facing processes, including the launch of our digital re-KYC journey, which enables eligible customers to update their KYC seamlessly through a digital interface. We continue to strengthen the Yono ecosystem by introducing new digital customer journeys, including a seamless 3-in-1 onboarding process for savings, DMAT, and trading accounts. We also introduced Yonoji, our agentic AI-powered virtual round-the-clock assistant on Yono business, and expanded WhatsApp banking for our current account customers. At the same time, we integrated our trade finance suite into Unobusiness while adopting artificial intelligence and trade finance operations to improve turnaround time and customer experience. On the credit side, we launched MSME Dream, through which we extended our business rule engine to cover SME loans up to 10 crore rupees from the earlier 5 crore rupees, enabling faster credit decisions while maintaining underwriting discipline. In the agriculture segment, we expanded digital document execution across the nation for Kisan credit card and agri-gold loans to further improve customer convenience. Technology is also strengthening our risk management framework through PRISM, our predictive stress monitoring platform. We are leveraging internal and external sources to identify early signs of stress in borrower accounts. This initiative also enhances our preparedness for the implementation of the proposed expected credit loss framework. Collectively, these initiatives reflect our continued commitment to building a bank that is digitally enabled, operationally efficient, and well positioned to deliver sustainable growth. Against this background, I am pleased to share that the bank has delivered another strong quarter. Our net profit reached a record of 21,121 crore, supported by healthy operating performance and disciplined cost management. Operating profit grew by 9.77% year-on-year, while our domestic net interest margin remained resilient at 3%, reinforcing our confidence in maintaining our guidance for the financial year. Our balance sheet continued to expand with the total business crossing 110 trillion rupees, while deposit exceeded 60 trillion mark and advances crossed 50 trillion mark. Underpinned by our diversified business model, growth has remained broad-based across retail, agriculture, MSME, and corporate segments, reflecting healthy demand. On the liability side, we have continued to maintain robust deposit growth in a highly competitive environment. Our CASA franchise remains one of the strongest in the industry, providing a stable and cost-effective funding base. Strengthening and leveraging our liability franchise remains one of our key strategic priorities as we continue to optimize the balance sheet. Equally encouraging has been the sustained improvement in asset quality. Gross and net NPA ratios have further improved and remain at their lowest level in over two decades. This is a reflection not only of a supportive operating environment, but also of years of disciplined underwriting, stronger credit monitoring, and improved collection mechanisms. Our robust provision coverage ratio and strong capital position provide us with ample flexibility to support future growth while maintaining prudent risk standards. Digital transformation continues to be an important differentiator for the bank. Customer adoption of the new Yono platform has been increasing, with the digital acquisition continuing to grow steadily. Increasing digital transactions, wider use of analytics and AI, and continued automation of internal processes are helping us improve productivity, enhance customer experience, and optimize operating costs over the long term. Our subsidiaries have continued to perform well and remain important contributors to shareholder value. The successful listing of SBI Funds Management Limited marks another significant milestone in unlocking value within the SBI group, and we remain committed to supporting the long-term growth of each of our subsidiaries. Looking ahead, we will continue to focus on improving the quality of growth along with growth in volumes. We remain committed to maintaining a healthy balance between profitability, asset quality, capital efficiency, and customer franchise. At the same time, we will continue to invest in technology, analytics, and AI to ensure that SBA remains well-positioned to meet the evolving expectations of customers and the changing dynamics of the financial sector. As we progress towards our 75th anniversary in 2013, we are building an institution that is not only larger in scale, but also stronger in capability, more agile in execution, and better equipped to support India's growth aspirations. Before I conclude, I would like to thank all of our stakeholders for their continued trust and confidence in the bank. The performance we have delivered this quarter reflects the collective efforts of our employees, the enduring confidence of our customers, and the continued support of our shareholders and investors. Thank you once again for joining us this evening. My colleagues and I will now be happy to take your questions. Thank you, Chairman, sir.

We now invite questions from the audience. For the benefit of all, we request you to kindly mention your name and company Before asking the questions. To accommodate all the questions, we request you to restrict your questions to maximum two at a time. Also, kindly restrict your questions to the financial results only and no question be asked about specific accounts, please. In case you have additional questions, the same can be asked at the end. We now proceed with the question and answer session, please.

Yeah, thank you. Good evening, sir. And of course, compliments to you all, sir, for the fantastic results. As far as the profitability goes, definitely I think the highest operating profit and the net profit of the bank ever had in a quarter, even surpassing that Q3 26, which was also a good quarter profitability wise. So it is one of the highest. Having said that, sir, as far as the business growth is concerned, while we have seen that in some of the other banks, this quarter has been excellent, very, I mean, exceeded the, whatever the expectation for there, for the entire deposit, credit, or entire business growth. In our case, if you look at the percentage terms, of course, this quarter has not been that good as compared to many of the other banks, though they are smaller in the size. So, our deposits grew only by 0.5%, advances to 0.32, of course, is good, but the overall business is 1.33%. Secondly, sir, there is an element in the other operating expenses which has gone down in the miscellaneous expenses, if you look, it has gone down by almost about 3,600 crores in this quarter. Overall, the other operating expenses have gone down by almost about 5,800 or 6,000 crores, which has added to the profitability of this quarter. So one of, I mean, I don't remember exactly in miscellaneous expenses what was there in the last quarter of 7,774 crores, which has now reduced to 4,108 crores, if you can just give us a little highlight on that. The other thing is, sir, I think after about many quarters, for the first time, there is an uptick in the absolute numbers of the gross and net NPA in this quarter. And at the same time, the SMA numbers also, if you look at SMA too, it is doubled in the last quarter. And even overall SMA also have gone up a little bit. Fresh silly pages also have gone to 7,000 crore from 5,500 crore. So, does it give any indications that there is some stress which is building up in the system on that, and what do you see going forward in the coming quarters, whether it will continue? Similarly, if you look at the provisioning, of course a small number, but the provisions have gone up, other provisions have gone up to 1270 crores as compared to reversal of 366 crores in the last quarter. So what is the reason for that? On the whole, a good quarter, but few items like, as I said, that in the miscellaneous income also, as well as the expenses, miscellaneous income also has come down in this quarter by almost about 4,000 crores in the other income side. So these are some of the pointer questions, if you can answer, sir. Thank you.

Thank you, Ajmira sahab. I think a few questions I will answer and my colleagues will take over from there. Deposit growth has to be seen from the lens of the liquidity which is available to us. And deposits have become extremely competitive landscape. And a lot of wholesale deposit rates have gone up, which is not the rate which we are willing to pay. Our retail franchise runs extremely well. If you see our retail deposit, term deposit growth is 14%, continues to be 14%. Even in the last quarter, we did 14% deposit growth and the retail term deposits. And more notably, Savings Bank, with a balance of 17.5 lakh crore base, has grown by 10%. And with the whole industry is actually struggling with CASA, probably we are an exception that we have posted CASA growth rate. And we also have very significant liquidity in our balance sheet. As on 30th June, we had an excess SLR of 3.06 lakh crore. And as we speak, also contributed by the FCNRB flows, we have excess SLR of 4 lakh crores. So, which means that, you know, we strongly believe, I mentioned earlier also, that the bulk deposit is a treasury activity. So, the treasury will decide whether they need to access this bulk deposit or they can go to the market and borrow, whatever is more acceptable rate. I think we really got this balance right in Q1, and which is actually reflected in your cost of resources, overall cost, what we paid for the resources, and contributing to the NIM stability. Almost seven basic point uptick has come, mainly because of the cost of deposits going down. And on the gross and net NPS, fresh slippages, I think we should not really be worried about this. Just to give you a number of fresh slippages, normally are higher in the Q1. If you see, I think you should compare from Q1 of the last year to this. And out of this 7,000 crore slippages what we had, as we speak, we pulled back almost 1,450 or 1,500 crores. So there There is no concern in any of this gross net or SMA front. And on the miscellaneous expenses, if you have some data on that, you can respond.

Okay. So in the miscellaneous expenses, apart from insurance expenses, where we have clubbed the insurance expenses to miscellaneous expenses this time, if I see, apart from insurance This quarter, it is 2,085, as against 2,266 of quarter 1 of previous year. So there is hardly any increase. And the insurance expenses, as against 2,074 in quarter 1 last year, we have expended 1,723.

No, as compared to the last quarter. No, no, don't compare with the quarter.

So what happens in the quarter four, most of the expenses get carried over in the last quarter. So the right way of comparison would be year on year.

While we also realize that the Q4 bump will always create this confusion, we have decided that some of the expenses, the bulk expenses will amortize over three quarters from starting with this quarter. So, then you will not see that uptick which happens in the expenses in the Q4.

Similarly, in the miscellaneous income side also,

which is lower 1,600 crores compared to 6,600 crores. In Q1 of the previous year.

Sir, Q1, sir, in the whole year, the overall business gets expand to 10, 12 percent. And the whole picture changes. So, some of these items are comparable with the last quarter, then gives a better…

Not necessarily. In our case, a lot of income is also booked in the Q4. So, I think earlier also we mentioned that the sequentially the numbers sometimes can be a little confusing because either bulk expenses or bulk income is booked in… So, in fact, for example, in Q1, the whole locker ends are recovered in Q1 itself. But you don't see that number in Q4. So, there are variations in terms of what are those bulk income streams which are available in East Quarter. And ideally, it should be the year-on-year comparison.

Sir, you refer on that FCNR deposit. Overall, under all these three items, how much money have we already generated and the leveraging, I mean, how much it added to our credit growth of this quarter?

The credit growth is...

Because of FCNR. And...

FCNRB will contribute credit growth to our foreign offices immediately. But it augments our deposits here. So, we have had almost 6 billion FCNRB deposit mobilized. And we also have done one OFCB of a billion dollar and 300 million of ECBs. So, in all about $7.3 billion have been funded by mostly our foreign offices. So, the $6 billion contributed predominantly to almost 45,000 crores in this later part of June. I think only 7,000, 8,000 were there in the June quarter. All right. Thank you.

So that's my first question. And then I have a question on margins. So if you could give any outlook on margins now, we did not give any outlook on margins in the fourth quarter, but now because now there are a lot of moving parts, there's FCNR and there's competition in some segments. And so if you could throw some color on your outlook on margins, that will be helpful. And on FDNR, if you could clarify, the deployment will be in overseas loans only, is it?

No, okay. No, the credit growth would be visible because leverage is provided by our foreign officers. And you're done or do you have some more questions? These questions. So, fee income broadly, I think, is a, I believe one of the positive developments in the last few quarters definitely have been on the fee income side. We still have a long way to go when compared to many banks. Fee income to overall income, we still are just about 15%. We have a potential definitely go to up to 20%. So our focus on the fee income continues to be there. Whatever are the sub-themes in that, whether it is loan processing charges, government business, CVE activities, I think every area is being focused on. But specifically on the government business, I think the 500 crores improvement, what you see is a combination of a bit of accounting treatment, because artists have insisted that some of the cash management solutions, what we provide to the government entities, should be, the income should be booked on accrual basis, not on the actual basis. So, 50% came from that accounting treatment, and the rest of the thing has come from the usual growth, particularly on the railway side. Anything, Ram, you want to add?

Yes, sir, you are right, sir.

In fact, but for that adjustment, the growth would have been just around 29% each on a year, which is like in a year it happens.

But this, we have switched to accrual system now, so this is more robust.

What are the other things, Maru? Margin Outlook. Margin Outlook, I still hold. I am not going to give you quarterly outlook. This is a full year outlook of 3% which I mentioned right in the beginning of my speech. We are sticking to that. Mike, Mike. Manojji, Abhi, Abhi, Abhi, activate name one, Mike.

My name is Manohar. A couple of observations. One is heads off to you on delivering on everything you promised since the last quarter, an excellent value over 10% in just in a quarter. At that time, we were around 920, 930, and today 1100 plus. I would like to have your thoughts on a couple of very important issues. On the day you took over, you started building the blocks for value creation. And then we won the award for the best global consumer bank. And we did the QIP also at a very good valuation. Now, a couple of thoughts when we look at, are your aspiration and the people management here on being the most valuable bank in India? In terms, valuable bank as far as listing price is concerned. One is that and also the valuable group when we consider the value of all our listed entities of the bank. And how we are looking at that from the day you took over, there was a big gap between the two banks, the leading private sector bank, everybody knows that, and us, there was a big gap. Now, apparently, that bank gap, when do we become number one and most valuable bank in India? And on a sustainable basis, sustainable basis. And also, along with our subsidiaries and associate entities, hats off to you, we did the value unlocking of our mutual fund, which is, which will be coming in the current quarter. Without that, we have achieved such great numbers, and the value unlocking in NSE is yet to come, possibly in the third quarter. So, would look at the thought process you are having, and all of us, on how we look at being the number one bank in India, valuable bank, and a valuable group as a BFSI entity. One is that, second thing is, your thought process on this today, credit growth of 18%, is that a one-off blip or we see it as sustainable credit growth of 18% plus and being the leader in credit growth in the credit cycle ahead. Because apparently the worst is over on the geopolitical front and inflation front also. And very clear signals given by the Fed and the RBI. And also one other besides would like to have you answer in detail. My congrats to all the AMC team and the people sitting here for the value unlocking. And also congrats to you for getting a CFO for next five years. Yes. You promised that and you delivered that. Heads off to you. And CFO has also great experience in handling, you know, similar size and large fundraising just a few days back leading roadshows worldwide. So looking forward to your answers.

Thank you. Thank you, Manuji. I think the first statement, what you made, I consider as a blessing land question. So I leave it there. The second question on the credit growth. I'm not answering the first one because I thought that is more of an aspirational one. But if I really have to answer that question, I would rather would like to say that, just reiterate what I mentioned right in my speech, that we are building the bank for future. Whether that future rewards us in terms of market capitalization, creating value, is the market perception about us. But our perception is that we would like to build a bank for four important stakeholders, which I always mention. Our employees, customers, shareholders, government, and regulators. Together, the last piece. I think this is something what we consciously and every day try that, you know, how do you improve in terms of satisfying the expectations and aspirations of all four stakeholders. So, maybe the outcome and the byproduct of that is improved market capitalization. We would be happy to realize that. As far as your credit growth question is concerned, I think 18% credit growth has to be seen from the base effect. I think Q1 of the previous year has been a muted quarter. And this is not only for SBI, the whole banking system had a muted credit growth in Q1 of previous year. So that's the reason we have given the guidance which is anchored on the nominal GDP expectations of the bank. We believe that maybe the nominal GDP would be around 12 to 12.5%, and SBI always grown 2 to 3% more than that. That's the reason we have given the credit growth guidance of 14 to 15%, which means that 18%, in my view, seems to be a little difficult proposition. Our own internal estimate for the industry is 15 to 16%. So if any economic activity actually gets primed more than what we see now, probably we may go to that 16% level, but our broader guidance is on the 14 to 15%. On the CFO front, yes, I hope, you know, this five-year term what you have spoken about will stand good. And we are happy to welcome Mr. Agarwal to your phone. Thank you.

Thanks. One more observation. I think you have got two more years to go. What I would like you to aspire, you did one great UIP at a great price. I know Mr. Opie Bhatt, Arundhati, and you know, everybody used to mention about fundraising, and you really did it. Before you go, always strike when you, in market cap principle is, when you get a good valuation, go for it. Now, I think the time is yet to come. I think we may go up to 1,200, 1,500, but before you retire, that would be a great time to hit the record and we do the capital educacy for the next leg of growth. I hope that aspiration will be on your corporate planning team. Wish you all the best for that.

But I must also acknowledge because of the, as I mentioned, we consider this interaction more of an educative one. I remember, I think two, three quarters later when I took over, many of you mentioned that, you know, please remove a line that the capital may be raised and ratios may be seen to be, and from that angle, you said that either you drop this line or raise the capital. So, thank you for that advice, and we were able to overcome that issue of QIP over us.

May I? Sir, Team SBI, congratulations for excellent performance, and good luck for the year. I think you're going to beat everyone on the street. Sir, first question is aspiration of India, aspiration of SBI, and growth of India is far dependable on what SBI does in the new emerging businesses which you have formed a vertical. Others are lagging behind or they are waiting for data from you. So looking at those aspirational 8-9 divisions, starting from data center, GPU, hydrogen, solar required for all of them, capex cycle needs almost 30 lakh crores in the next four years. Part of it will be funded by global players, part will be India. To meet those requirements, how are we gearing up to meet those industry needs? And because this will be all large giants. I'm not counting Amazon, Microsoft or those hyperscalers asking for debt from you. But the domestic partners and domestic companies which are emerging, which may be not visible to the state today, they may be less than a billion dollar capital. But I understand you have sanctioned few and you're assessing few. So I need a little guidance on that aspect because SBI's future would be far brighter than most of them because most of the other bankers are doing ram ram. Ram Ram.

Ashkuni, you can take this. I will supplement after Ashkuni's response.

So you are right. One is this center of excellence, which has come up as you pointed out. And it is developing deep expertise in all these sectors. Our teams used to do that already, but this is fully focused on this. So these are still early days. They have, they have assessed a few and they We have updated the risk models, which our teams used to do by having more deeper engagement with the industry players. So we are having some pipeline there, but even in the merger and acquisition space, which is again a newly opened space for us, we are seeing very, very good traction for us because everybody is consulting us and we have a lot of opportunity, which we see there, including some in this space as well. So it's like turning out some new segments, new classes of customers, which we earlier were not able to handle. For example, software never borrowed from us, but now they are under this. If they want to acquire companies, they are borrowing from us as well. So I think there is much, much opportunity which is available, and yes, we will set those benchmarks, and everybody else is welcome. We will share the knowledge as it stands.

One of the constraints, as you pointed out, would be that how do we fund this requirement? Where is the capital pool coming from? I think this brings me to my favorite narrative that the shift in the household savings which has happened, and this kind of growth of 30 lakh crore cannot be funded by the banks alone. One is, of course, how many banks really will be getting into funding this capital expenditure. The other thing is that capability of the banks to fund this capital expenditure. So, the overall structure of funding has to change. As I mentioned earlier, if the household savings are going to pension funds, mutual funds, insurance companies, they all have to contribute to this capital expenditure in some form or the other. So, what are those structures which will emerge? Number two, many of us have a kind of illiquid asset portfolio in our books. Take home loans, for instance. I did mention earlier also, again, I'm reiterating. The overall system has got 30 lakh crore or even more home loans. 34 lakh crore home loan portfolio, which is absolutely illiquid. So, whether we can bring a securitization structure. But if securitization structures come, unless this non-bank participation is there, this is not going to really work. So, I think we are consciously working as a market leader to bring those structures and help this funding capability in the system to grow.

Sir, you rightly answered my next question, but if you are considering hydrogen, solar, connectivity, now REITs and INVIT funding, domestic M&A plus global M&A, and 82 lakh crores of mutual fund size today as of June, keeping a combination and CD ratio at 82% today, the bank's capital requirement at SBI may be met. There may be opportunity for SBI caps and yourself to underwrite and downsell to many banks because they are, depending if SBI writes, I'll write the proposal. So keeping all those aspects in mind, I see a far better prospects for SBI in the next 4-5 years, specifically for these sectors, compared to what others are thinking right now. And there may be overhanging one other sword on other bankers of merger and acquisitions between themselves. Maybe HBI lines up with one or two. So what happens to the nation and what happens to HBI, that's why I'm asking this.

No, in some manner you are right. I think there's a greater opportunity emerging. What is required, apart from the capital which we have spoken about, is the capability. This is what Mr. Tiwari has mentioned in terms of our Center of Excellence, Chakra initiative, So that at least a dedicated band of people who understand the emerging industries and what are not only opportunities and the risk associated with funding them. You mentioned that if SBI underwrites others will participate, SBI itself has to develop that confidence and capability which we are investing now in our people through this Chakra initiative. And I believe, I am sure, I agree with you in terms of the emerging opportunity in these areas. And how do we position SBI to be the premier bank in that we will consciously are working on it.

The main contributor is that we have given a tax holiday till 2047 along with Malaysia. On the data centers. Yeah, data centers. Thank you and thank you for answering and good luck for the year.

Good evening, sir. Kunal from SETI. So, yeah. So, couple of questions. Firstly, on the overall loan book, so if we look at it compared to the other banks, we have seen almost like a flat growth on the corporate side and growth has primarily come from SME retail and AGRI on a sequential basis. So, one is maybe did we actually transition to this MCLR pricing which you were indicating last time from pre-build to MCLR and that would have taken the rates up and we have seen some rundown or competition out there. Was that the reason or maybe we will see the uptick on the corporate side going forward because overall at the industry level still corporate growth is quite strong. Now it has outpaced the overall system growth. So, that's the question and secondly within the loan book when you look at it, even express credit, maybe the sequential traction is not strong. It's still like 8 odd percent. So, anything to read into it, we were expecting to take it into double digit over a period. So, how is the traction out there on the PL side? Then secondly, getting on to margins, so in terms of the entire MCLR transitioning on the corporate, is it largely done during the quarter, and is that reflected in the yield improvement which is there, and bulk deposits, if you can just give the proportion, What is the proportion of the bulk deposits today and how, maybe as of June and how much it was last quarter? And any interest on IT refund if it was there within the margins during the quarter?

So on the corporate side, we did mention that there have been a significant growth on the T-building pricing. So what we see on the corporate side is a combination of moving a part of that portfolio to MCLA And obviously, in the process, somebody who is not willing to pay MCLR, I have looked for alternatives. But lastly, the T-bill pricing itself is renegotiated in many cases, improving the yield. This still is a work in progress. It's not full transition. It's not happened. But there is a general awareness, both in our teams as well as among the customers, that what is our pricing expectation? So, what the growth probably would be based on these expectations only. There have been some instances where obviously people have moved. So, which you see sequentially our growth rate has been lower, but we used to have a strong dip sequentially every year. And that dip is much less than what it used to be earlier. So I think it should be seen from that angle. Maybe others are growing in a map. But we have very fairly large book. Our base, 30%, 33% of our book is corporate book. I don't think anybody in the system has such a large book. Even if they grow, the percentage times it looks bigger. But we have good visibility. I would ask Ashwini to respond further on the copyright book. But coming to your express credit, we are seeing a good amount of sourcing and good amount of disbursements in the current quarter and also the quarter which we just finished. But it is not going into the double digit territory because of the gold loans. We have seen that many of our, the normal express credit customers are opting to take gold loan. Obviously, there is an interest rate arbitrage, almost 3%. So, as somewhere, you know, this gold loan juggernaut will slow down and some movement will happen to express credit. Right? But we have an opportunistic growth in terms of gold loan. And we are doing it in a full basis, both on the personal gold loan and agricultural gold loan. So, no worries on that. MCL transition, as I mentioned, is a work in progress. We don't disclose on the bulk deposits proportion. So, I think we'll stick to that. Because this number is a surgery activity, and every time you guys get worked up, you know, bulk deposit going up, bulk deposit going down, and your financing models and your Excel sheets, all will go for a toss. So I would rather stick to that. I will not go into the bulk deposit thing. But one thing I would definitely say that the proportion is significantly coming down. And broadly will be helped by the FCNRB flows. If we have 1 lakh crore flows of FCNRB, which we expect to have, I think to that extent, predominantly it will be reducing our bulk proportion.

Entirely? Because there would be some leverage also. So in terms of this 1 lakh crore, we heard that you mentioned 10 billion of FCNR. What do you expect the leverage from our own balance sheet, which will be there on the

balance sheet? Entire? Entirely on our balance sheet, leveraged now, overseas offices.

What is the quantum? So, like 6 billion also, which we raised till date, it's like entirely.

I mean, I don't want to, we don't want to comment on the yields and the leverage which we are providing. I can tell you that it is all leverage mostly is provided by our own foreign offices. Got it. And interest on it?

You want to add anything on the copyrights? Interest on IT refund.

Interest on? IT refund. Isn't it? I think this quarter we don't have any. No interest at all.

220 crores is what we have. Compared to how many crores last quarter? So last year, first quarter, we did not have any, but quarter four, we had 1,001 crores.

Okay, thanks. Yeah, you want to add something on the cup?

Nothing much, the pipeline is very strong. Overall, if you include the term loan undisbursed, the working capital not utilized, and pipeline, It exceeds 9 lakh crores. So, this is a strong pipeline for corporate credit. And as I explained, the M&A is a very good opportunity we are seeing, very strong interest.

Thanks.

Thanks and all the best, sir. Sir, hi. Sir, a couple of questions here. Sir, first on FCNRB, so there are two legs, right? First, it will reduce the bulk deposit. So, it should be helping in overall cost of deposit or cost of fund. But the overseas book that also sees an increase by the equivalent leverage amount, there the spread should be very minimal, right? So what is the net impact of FCNRB on the margins? Would it be margin dilutive or would it still be margin positive for the bank?

I will respond on the domestic side and overseas Ashutosh will respond. Domestic, I don't see any significant negative or positive impact. Because, as I mentioned to Kunal, that we don't have a significant proportion of bulk. So, even if it is 1 lakh crore on a 60 lakh crore deposit base, it's not really going to move the needle. Okay. On the overseas side, Ashutosh, you can respond. Thank you, sir.

So overseas side, we don't see any major impact on our overseas book because we have a large trade finance book there, where you know that what is the name in a trade finance. One third of the book was trade finance. So we'll have some maybe remix in the portfolio of the foreign offices. But net net, there will not be any impact on the overseas offices.

So, what the foreign offices are doing is that, you know, if they are funding FCNRB by providing leverage, they are reducing on trade finance. The margins are equivalent or sometimes the margin on supply chain is much lower than what they are getting on the FCNRB. So, overall, I do not think there is any impact either on the whole bank name or domestic name.

Sure. Secondly, sir, on gold loan, so what is your outstanding gold loan on Agri side, and what is the yield that you charge on gold loan both on retail and Agri?

So our personal gold loans, just one second, is up to order of 1.25 trillion, and Agri gold loans is up to order of 1.85 trillion. So both put together, we crossed 3.1 trillion as on June. Sir, typically they are in the range of 8.5 to 8.9 percent. And the personal gold loan is slightly higher and agri-prob is lower.

Sir, actually this is an observation. You are growing retail gold loan at 100 percent almost, right? And this is one product where there is no competition from private banks, large private. There are small players, regional players which are reasonably active and their yields are 10 to 11 percent if not higher. This is the only product where you are growing at 100 percent almost, industry is also growing at 100 and the entire growth is contributed by PSU banks, right? And there is no competition and the yields that you are charging is actually much, much lower than comparable private peers. Is there a scope to increase the yield here or you think this is, you know, this will remain like this?

No, we will definitely be looking at, you know, I think we have enhanced the yield on gold loan over the period. But you also must understand what is the ticket size of this gold loan. If lower the ticket size, you have a better option of pricing it better. People are willing to pay in a lower ticket size. But we don't want to get into that your ticket size. Our average ticket size is almost 2.5 lakh to 3 lakh rupees or even more.

Yes, sir, 2.5.

And our loan to value is less than 55-56%. So with this matrix, generally the people who come to us are basically coming for the price. So there is not much, we will never be moving to double digit territory there. And I also believe that this gold loan growth need to be seen from an opportunistic point of view. This is not our core portfolio. So today the growth opportunity is there and there is no capital allocation, there is virtually risk rate is zero. So from that angle is ROE accretive, while small compromise on the margins. And it is a safe portfolio.

Sir, and lastly, on personal loan side, right, so RBI data suggests that banking industry is growing at around 10-11% personal loan. Same is the case with SBI and let's say large private. But if I look at other lenders, right, NBFCs, they are growing at 20-25% on the personal loan side. Maybe they are targeting self-employed sector, self-employed segment, and it looks It looks like, you know, banks are shying away from that segment.

So, one of the reasons I don't know whether I mentioned with you is that the deeper penetration of a product is not there. For example, you take our express credit. 99% of the borrowers are salaried customers. And if you want to go to a self-employed and professional category, even if they are good quality customers, You need to have a strong collection mechanism. I think the differentiator between mainstream banks and NBFCs is the collection mechanism. So we also realized that we need to increase the depth of each of our product, whether it is home loan, our personal loan, our many other products, even MSME, for instance, that collection intensive segments are not tapped by us, despite having our pricing power reach. So, we have for the first time embarked on creating a full-fledged collection vertical. Is our cesium collection there here? Yeah. So, Hemant is our head of collection vertical. He will be driving the full-scale collection mechanism to be built. We are building from scratch. Because virtually, in a bank like SPI and Express Credit, let me tell you, 75 to 76% of the recoveries happen by way of moving funds from savings bank account to loan account. That is not collection. Correct? So, you need to have a very strong collection mechanism to take these products to self-employed and professionals where our yield improvement will happen. But before we get into that segment, we want to ensure that our collection mechanism is strong, robust, and field staff is available to us. We are creating feet on street across the country. Almost 6,000 is our estimated number, which we will be deploying in feet on street through our SBOS, that is our subsidiary. And we are extensively using our analytical and AI capabilities to develop the models and combine feet on street, branch network, and contact center to create ecosystem of collection. And that would help me to go into the product range what you are looking for. While we have the product, we have to deepen them.

So is that a one-year target or it could take a more? One year.

All other elements are in place except that, you know, we need to get feet on street because they are qualified people. We don't want to have any reputational risk. We have to train them well. We have to bring the DNA of SBI in their activities.

And lastly, sir, if you can answer the pension provision, I mean, on a full year basis, are we passing that hump wherein, you know, the pension provision should start declining irrespective of interest cycle depending on the employees who are on the, you know, defined contribution, defined benefit proportion.

It is happening. I think it's the pension is a combination of what contribution we are making to the regular contribution which we are required to make. That seems to be on a declining trend. But the real impact will be post-2035. Because 2010 is where NPS is introduced. So till that time, it will be an incremental decrease, but I think significant decrease will come post-2035, I think. Right? But we also are getting benefit of actual assessments and many other things. I think that is reducing the pension.

You want to add anything on India? The pension, the MTM gains on pension and gratitude fund, if I compare, this quarter was 935 crores, quarter one was 1,125 crores. So the whole, every quarter actually, you know, comes and revalues it, and depending upon the yields and all, it is made.

Yeah, in terms of cost, I think significant reduction you will see in a couple of, maybe three, four years later.

Hi sir, Param here from Investec. So first question, firstly congrats on the quarter. So first question on the ECL, a number of your public sector peers have given out numbers on broad impact on a run rate, credit cost, as well as the one time network hit. So if you can call out something, if we have done an assessment on that.

You know, if you're looking at a number, I'm not giving any number at this moment for two reasons. One is, of course, I did promise that in Q1 results, we would be able to give some number. It took longer than what we expected in terms of pushing the whole data into our IT systems. My team tells me that 18th August, probably they would be pushing all the models and data into the IT system. The correct way of doing it is that probably when we meet again in Q2, we will give you the numbers. But one assurance I can give you, it will not have any major impact for two reasons. One is we will have some capital augmentation because of the mutual fund and hopefully on the other divestment, major divestment which we are planning. And we also intend to take the regulatory dispensation of transitioning, which means that, you know, annual impact would be less on the CRER.

Okay, sir. Sir, on the run rate credit cost, right, so, I mean, there will be a bump up. Most banks are talking about it. I want to ask you, sir, conceptually, since, you know, you are the lender who sets the prices in the market, will this be passed on to the customer, say if it is 10 basis points, 12 basis points, will this be passed on to the consumer because logically, I mean, most of your loans are EBLR plus risk, and if the cost of risk is going up because of ECL, will that be passed through in a lending rate as well?

So, this tension is hypothetical because, first of all, we don't know what could be the run rate on, because much of the stock will be absorbed, right, on the 1st of April 27. And all of us are looking at strengthening our collection mechanisms. Again, I forgot to mention that is, is also one of the compulsions what we need to strengthen our collections. Our role forwards from any of these SMAs is very limited into NPS. Stage 1 and 2 hardly become stage 3 for us. But we still have flow rates to handle on SMA 1 and 2, which probably would have some run rate impact. But we don't currently invest in a very major impact which forces us to pass on a cost to the customers. We should be able to absorb those costs. Unless there is a credit cycle moment, if credit cycle moves adversely and those costs go beyond certain level, it may happen. But I think I don't foresee, in the first year, I think everyone will be fine-tuning their models, watching how to improve the positions instead of looking to immediately pass on the cost.

Any numbers on, say, SMA 1 and 2 at a bank level, regardless of ticket size? At this juncture?

We have never disclosed those numbers. They are very dynamic.

Sir, question on the FCNR. You mentioned the number about $10 billion. We have already done more than half of that and we have seen that generally the CNR flows based on the last episode, it tends to be back ended. So why are we, you know, talking about a number that is, say, it appears low from where we are or how are we approaching the problem in the sense that should we be going out to get as much as we can get or are we setting ourselves a target that, you know, we want to achieve so much and, you know, we will… No, we don't have any target in mind, honestly.

But I also don't think that it will be backended as much what we have seen in 2013. Most of the backending in 2013 happened because the leverage confusion was there and most of the public sector bank adopted leverage in the later part. SBA alone, 70% of our deposit was raised in the last period, in last cycle. But this time, you know, there is no confusion on leverage. There is no confusion on whether you can give SBLC or not SBLC. So, flows seem to be more spread out. If you see, some moment definitely will be there. Last mile, some people may come. So, our estimate is based on the inquiries, visibility, and customer outreach, what we are doing. We may exit also, I am not very sure, but it appears that 10 billion seems to be a reasonable number.

So, one last question. I think this was asked earlier. There was a 1269 crore other provisions in this quarter. Is that a prudential provision that was made in this?

So, the 1269 mostly consists of the PLI provision.

See, the PLI provision we back ended last year, but we decided to spread out four quarters this year.

Okay, okay. Thank you so much. Congrats, one second.

Hi, sir. Yes, Pritesh from Dam Capital. Sir, two questions. One is on the corporate yield side. Once we see a significant flow of FCNR, the liquidity will obviously go up. How do you see yields after September, especially on the corporate side? You mentioned about bulk deposit as well. So both sides of the leg, how do you see that? And the second question is, there is one slide which you have mentioned that a lot of incremental loans are being generated through analytical leads from AI. What does that mean in that sense? What is analytical leads? And 22,000 crores, which is raised in retail, is largely express credit or any other production?

Not all types of loans. So we use AI models. We've been using Fugwise sometimes. It's not new. And these analytical leads, based on our data analytics, across the product segments are given to our operating people. It could be home loan. It could be express credit. Even with gold loan, in some of the analytical leads are generated in gold loan also, for the gold loan purpose, and MSME loans. So, all kinds of spectrum of loans are, leads are generated and given to the feet on street and branches to convert these leads into business. That aggregated to 22,000 crores. On the corporate side, I think the pricing will be more determined not by the liquidity which is available. I think what happens in the market, because we have been, I think one of my DMDs has mentioned, the shift from market to bank and bank to market is kind of very fast now. Earlier, we used to have a lag. The market prices, market rates in bonds and CPs go up. People used to take a long time to come back to banks. But they seem to be allocating, you know, the shift is very fast. So, I believe that corporate pricing will be more determined by what is the CP rates and NCD rates, which again will be determined by the liquidity in the system. There could be some moderation there. As I mentioned right in the beginning, as far as the SBA is concerned, we have conveyed our pricing expectations. I don't think that we will deviate too significantly from that path.

Thank you, sir. Thank you. Hi, sir. Am I audible? Just a few questions. Firstly, on this 1269 crore, other provisions, you said it's all for PLI? No, partly.

750 odd crores is 40.

750 to 800 is PLI. And you are amortizing it this year?

Yeah. So every quarter we are making that…

Amortization is not. See, expected PLI is around 3000 crores. Instead of taking in the last quarter, we are taking, you know, every quarter, one-fourth of that. Understood.

So secondly, on your current deposit growth, current accounts, like last quarter it was low, but we said that there was a base effect. There were flows in 4QFY25 due to which the YOY growth was low. But this time, again, it has been only 4-5% YOY. So what exactly are the reasons for this? And what are we doing to improve this?

Current account, I think we have performed better than the industry. If you really see in absolute numbers. We used to have mostly, you know, sequential declines that will continue. The current account, overall market is going through difficult time. What is interesting, what I mentioned last quarter also, I have seen in this Q1-2, is that while the governmental current accounts are virtually drying up, we have had 14% growth.

Yes, sir.

Huh? 14% growth in non-governmental deposit. This is what is actually is very interesting to note that while we have, we have been one of the biggest current account holders for the government balances. That is drying up. Still we are holding on the current account market share because our penetration in the non-governmental is increasing significantly. 14% growth rate on the non-governmental. So, I think we are doing fairly well. We can do much better. But I think overall current account balances in the system are going to go down.

And sir, secondly, our forex revenues or forex fee income was just 500 crores. Is that because of the NOP guidelines? It will normalize now to 1500-ish from next quarter, right?

You want to say something, Shamshir?

But is it now here to stay? At this level, 500? If I may squeeze in one last question. Sir, in one of your interviews, you spoke about listing SBI general insurance also.

Did I? Anyway, I did mention two companies which could be potential candidates for listing, and one company anywhere will be listed, right? The other company, I have not given any timeline. I am still seeking that SBA General is the next candidate for listing, but no timeline.

Due to pausity of time, we will now take up a few questions coming in through the online webcast, which will be addressed by the Chairman, sir.

So, this is a question from Sneha Ganatra. Is FCNR deposits also covered under insurance? Yes, FCNR deposits are also covered up to 5 lakh rupees under DICC insurance cover. Vishal Gupta, the bank has revised a 527 loan growth guidance to 13% to 15% from 12% to 14% which signals retail, SME, corporate or agriculture. By the way, we have revised our corporate 14% to 15% credit growth. Credit growth remained, as I mentioned, broad-based and we expect that it continues to be broad-based. Bhanti Chawla, expected amount of FCNRB deposits to be raised and its impact on cost of deposits. I think we fairly answered this question. About 1 trillion rupees would be our total deposit mobilization. And we don't see any significant impact on the cost of deposits. Nasir Sheikh, fresh slippage has increased sequentially in Q1. Could you provide more color? During Q1 27, our first slippages were 7,046 crores, out of which we have already pulled back 1,400 crores as on date. And segmental numbers are also given, but I will just read out, AGRI 2,600, SME 2,300, personal segment 2,100. Anand Agarwal, was there any one-off in non-interest income? What was the amount of dividend from subsidies this quarter versus Q1 last year? There is no such one-off in non-interest income. Dividend income during Q1 was 72 crores in Q1, FI 26, 31 crores in Q1, FI 27. Normally dividends get paid only in Q3 and Q4. Mayur Parkaria, impact of FCNR and NIM, I think we already answered this question. Subramani Ramaswamy, don't you all think that the guidance of 14 to 15% being too conservative compared to your past performance so far? So, we did explain that due to base impact, our year on growth is more than 18%. And our expected growth guidance is essentially based on the nominal GDP and what we grow over nominal GDP. Subramanian IR, Morgan Stanley, request you to help us with the number for the interest on income tax refund. Interest on income tax refund was 220 crores.

Thank you. Thank you, Chairman, sir. I trust all the questions have been addressed. We will be happy to respond to other questions in offline mode. Let me end the evening with thanking Chairman Sir, MD Sirs, the MD Sirs, Top Management Team, Senior Officials of the Circles, and various offices connected to webcast, analysts, investors, ladies and gentlemen. We thank you all for taking time out of your schedule and joining us for this event. To round off this meeting, we request you all present here to join us for a high tea, which is arranged just outside this hall. Thank you. Thank you so much.