Meanwhile, RBI increased the repo rate recently by 40 bps in an off-cycle meeting to rein in inflation, while supporting growth. However, hardening of global crude and commodity prices amidst prolonged geo-political tensions, along with supply chain issues arising out of prolonged lock down in China could keep inflationary pressures on the upside. While India is expected to grow at 7.2% in FY2023, the current account deficit could breach 2.5% of GDP mainly due to geopolitical tensions and elevated crude oil prices.

Your Bank’s Performance

With the gradual improvement in economic activity, your Bank’s business has continued to show double digit growth in FY2022.

Deposits

During FY2022, your Bank’s total deposits grew by 10.06% to surpass the ₹40 lakh crore mark of which domestic deposits grew by 9.80% to ₹39.20 lakh crore. The CASA deposits grew by 7.78% to ₹17.75 lakh crore contributed mainly by sustained growth of 10.45% in saving bank deposits. Amidst the low interest rate environment, CASA ratio of your Bank stood at 45.28% as of March FY2022. During the year, your Bank opened 98.75 lakh new Savings Bank Accounts, of which 63% have been opened through the YONO portal / app.

Credit

During FY2022, your Bank’s advances grew by 11% to ₹28.18 lakh crore, compared to growth of 4.8% in FY2021. While domestic advances grew by 10.27%, foreign offices advances grew by 15.42%. The domestic loan growth was led by robust growth of 15.11% in retail personal loans which now account for 41.6% of domestic advances. Agri & SME loans grew by 6.57% and 9.52% during the year to ₹2.28 lakh crore and ₹3.06 lakh crore, respectively.

The retail personal loans portfolio has crossed ₹10 lakh crore mark driven by Home loans and unsecured Personal loans, which grew by 11.49% and 28.50% respectively during FY2022.

Investments

Your Bank’s investment portfolio increased by 9.6% to ₹14.93 lakh crore in FY2022, of which 96% are domestic investments. Within the domestic investment portfolio, 60.77% is in HTM category while the rest is under AFS category. The yield on investment is in line with the interest rate scenario and has come down to 6.07% from 6.32% in FY2021.

Profitability

During FY2022, as the economy recovered from the effects of COVID-19 during the second half, your Bank’s performance displayed a smart recovery. The standalone net profit has increased by 55% over previous year to ₹31,676 crore in FY2022. Your Bank has also registered improvement on the asset quality front, provision coverage and NIM.

The Net Interest Income of the Bank registered a healthy growth of 9.03% over the previous year, to ₹1,20,708 crore. Growth in the lending book, together with control in slippages have contributed to higher interest income. Credit costs have also declined significantly by 57 bps to 0.55% in FY2022. The Operating Profit of your Bank for FY2022 was ₹75,292 crore in FY2022, an improvement of 5.22% over the previous year. The cost to income ratio has also declined marginally to 53.31% in FY2022 from 53.60% in FY2021.

Return on Assets increased by 19 bps to 0.67% in FY2022 compared to 0.48% in FY2021. There was a significant improvement in Return on Equity which moved up by 398 bps to 13.92% in FY2022 from 9.94% in the previous year.

Capital

The capital ratios of the Bank improved during the last financial year on the back of better planning, internal accruals and efficient risk management of the banking book. Capital Adequacy Ratio (CAR) as at the end of March 2022 stood at 13.83%, an improvement of 9 bps over March 2021.

The Tier II capital base also improved to 2.41% in March 2022 from 2.30% in the previous year.

Dividend

I am happy to announce that the Board of Directors of your Bank has declared a dividend of ₹7.10 per equity share (i.e 710%) for the financial year ended March 31, 2022.

Customer Convenience

We believe that the evolving customer expectations and shifting customer sentiments demand an agile approach that adapts to the evolving situation. Today, your Bank is focused on leading the FinTech charge, by leveraging digital transformation and customer engagement in innovative ways. To build and sustain the momentum for transforming India, your Bank has created the highest number of touchpoints at branches and other outlets.

As of March 22, your Bank has 22,266 branches, over 68,000 Business Correspondents and over 65,000 ATMs including 12,872 Automated Deposit & Withdrawal Machines (ADWMs). On an average, over 1.32 crore transactions are carried out every day through these ATMs / ADWMs.

To enhance customer convenience and customer delight, the following new facilities were introduced during the FY2022: (a) Facility to request for new cheque book and stop cheque request has been enabled at CSP outlets, (b) The facility of blocking of debit card has been enabled at CSP outlets.

With a presence across all time zones through its 227 locations in 30 countries, your Bank remains a front runner of International Banking among Indian banks. During FY2022, your Bank continued rationalising its overseas operations by a closure of an overseas Subsidiary- SBI Botswana Ltd, and merger of the Ilford branch of SBI UK Ltd. with its East Ham branch.

Technology & Innovation

The future of banking is in the realm of technology. Surge in technology adoption since the outbreak of COVID-19 pandemic has prompted your Bank to take several initiatives in the technology domain with a view to improve user experience and address emerging risks.

Your Bank has been working on upgrading ATM connectivity by arranging 4G connectivity to off-site ATMs. Your Bank is continuously working to improve the network experience and minimise outage. Alternate Secondary Links to the branches and offices have been put in place to reduce and eliminate downtime.

Your Bank has also devised an early warning and insights mechanism related to cybersecurity threats to comply with the RBI Cyber Security Framework by arranging a honeypot solution.

On the product side, your Bank has, over the years, developed a strong portfolio of products and services, and leverages technology to deliver and manage them in a personalised and customer centric manner. Your Bank is leveraging data analytics to gain a 360-degree view of the customer journey to customise need based financial products and services. Your Bank is simultaneously using technology to capture deeper insights to address customer pain points at various touchpoints.

Your Bank’s flagship digital platform, YONO is delivering cutting-edge digital services to millions of retail customers, farmers, corporate clients and to customers of select overseas offices. To increase penetration and nudge customers into adopting technology, the YONO Lite app is now available in 12 Indian languages while the Yono Krishi app is available in 10 Indian languages.

Given the technology capability, your Bank has participated in various metro railway transit projects to digitise micropayments. Your Bank has been awarded Nagpur Metro, Noida Metro and MMRDA Lines 2A and seven metro projects to implement qSPARC technology on the RuPay platform.

Retail Loan Management Solution (RLMS) and Vendor Verification Module (VVM) were introduced in loan processing to ensure uniform underwriting standards, seamless delivery and end-to-end digitisation aimed at providing customer delight. Further digitisation of the entire home loan journey is at an advanced stage. In-house developed digital platforms like YONO and OCAS/RAAS are being promoted extensively as resource tools to maximise home loan business and increase our market share.

Your Bank has introduced Trade Regulatory Reporting and Compliance Solution (TRRACS) applications, which has led to a reduction in pending EDPMS/IRMs/Export Advances entries over a period of time. For seamless cross border transitions, your Bank has completed integration with the real-time payment system in Singapore, namely G3-FAST. This will enable payment processing on a real-time basis enhancing the ability to deliver innovative and commercially attractive products while minimizing settlement risk.

Your Bank has also embarked upon a complete revamp of its e-Banking web platform for its overseas operations. Aiming to achieve dual objectives of cost-saving and increased efficiency, centralisation and off sharing of back-office processes has gained momentum with the migration of jobs from two more geographies, i.e., Canada and Singapore (in addition to UK and Bahrain).

The use of technology has also percolated in operations with migration of many task specific technology platforms. Various new IT initiatives have been rolled out in SARG vertical for better monitoring of legal cases in stressed accounts. This will further strengthen the transparency and efficiency of the recovery process.

Strategic / New Initiatives

During FY2022, your Bank has continued undertaking strategic initiatives to achieve the long-term objectives set by the Bank. Some of the important initiatives are:

• Your Bank launched ‘Samarthya’, an engagement programme for all employees in the age group of 35 or below. The programme has been offered through a unique – “Smart Classroom”. Both Officers and Clerical staff attend the programme promoting cross-pollination of perspectives and ideas. Over 67000 employees are to be trained under the programme, and 72% have already been covered in FY2022.
• Two new End-to-End Digital Loan Journeys were introduced, viz., Pre-approved Two-Wheeler Loan (SBI Easyride) and Pre-approved Business Loan (PABL) for PoS customers of our subsidiary SBI PSPL (SBI Payment Services Pvt Ltd.). Loans aggregating ₹21,898 crore have been extended digitally through Analytics-based products in FY2022.
• To enhance the level of knowledge of the frontline staff and enhance customer experience, your Bank has introduced a mass knowledge enhancement programme, “Project Utkarsh”, It has also introduced the “Customer Service Index” for categorizing branches based on the quality of customer service.
• For opening new accounts in most customer categories (Individual & Non-individual) quickly and efficiently, image-based processing has been introduced in the year 2021-22. For the convenience of customers account opening facility through Video KYC was launched on 22.04.2021. About 6.40 lakh accounts have been opened through this facility till March 2022.
• A facility for SMS alerts in 13 languages has been enabled facilitating customers to register for SMS alerts in their preferred language. Multiple initiatives like multi-streaming of SMS outflow from CBS to Delivery Platform, infra upgradation for handling a higher volume of SMS and modifying SMS generation and transmission processes in CBS to handle higher volumes have been taken to reduce delays in SMS delivery.
• Functionality of Video Life Certificate was launched in November 2021, to facilitate submission of Life Certificate by pensioners through Video Calling.
• A new application for loan collection was launched in April 2021, for recording the follow-up calls to delinquent account holders. During the current year, 2.55 crore calls were made using this application.
• A mentoring program for new female employees was launched during the year to ensure their smooth transition in the organisation.

Your Bank is actively onboarding customers on the FX-Retail platform rolled out by CCIL (Clearing Corporation of India Ltd.), through which customers benefit from transparent and competitive pricing. Your Bank has also made FX-All and e-Forex trading platforms available to customers.

Subsidiaries

Through its subsidiaries, your Bank provides a wide range / bouquet of financial products and services to its customers.

On a standalone basis, SBI Capital Markets Limited posted a PAT of ₹339.70 crore for FY2022 as against ₹273.25 crore for FY2021. On a consolidated basis, it posted a PAT of ₹620 crore against ₹527 crores in the previous year. SBICAP Securities Limited, the broking arm of SBI Group, posted a net profit of ₹233.01 crore during the year ended FY2022 as against ₹207.12 crore in FY2021.

SBI General Insurance Company Limited has expanded its presence pan India through 137 branches. To date, the company serves around 8.7 crore customers. It registered a growth rate of 11% in FY2022 with a market share of 4.15%. It is ranked 7th amongst private insurers and 12th in the overall industry. It has generated a net profit of ₹131 crore in FY2022.

SBI Life Insurance Company Limited has retained its pole position in FY2022 amongst private life insurance companies in Individual New Business Premium, Individual Rated Premium, Total Rated Premium and Total New Business Premium. The company witnessed 23.4% growth in Total New Business Premium (NBP) vis-à-vis the industry growth of 12.9%. The company registered PAT of ₹1,506 crore in FY2022 against PAT of ₹1,456 crore in FY2021.

SBI Cards & Payments Services Limited delivered PAT of ₹1,616 crore in FY2022, a y-o-y growth of 64% over FY2021.

SBI Funds Management Limited is among the fastest-growing AMCs in the country and has grown 28.3% in FY2022 against the industry average of 19.5%. It has one of the largest investor base, with over 107 lakh live investor folios, including 31.50 lakh new folios added in FY2022. It posted PAT of ₹1070.65 crore during FY2022 as against ₹860.40 crore last year.

SBI Global Factors Limited, which provides factoring services for Domestic and International trade, registered a turnover of ₹4,773 crore for FY2022 as compared to turnover of ₹4,352 crore in FY2021.

SBI Pension Funds Private Limited is one of the seven Pension Fund Managers (PFMs) appointed for the management of Pension Funds under the Private Sector. The company’s total Assets Under Management (AUM) as of 31st March 2022 stood at ₹2,82,476 crores (y-o-y growth of 26.89%). The company holds the leadership position amongst PFMs with a market share of 38.35%.

Recognition & Awards

Your Bank’s efforts in various areas of banking were acknowledged and it has won various awards during the year. Your Bank was recognised as “Best Cash Management and Transaction Bank in India” by Asian Banker Magazine, Singapore, under Transaction Finance Awards 2021. Your Bank has also been awarded the “Best Trade Finance Provider (India)-2022” for the tenth consecutive year by Global Finance Magazine. Your Bank won Gold in the prestigious ET Human Capital Awards under the category ‘Excellence in Creating a Culture of Continuous Learning and Upskilling’.

Your Bank has been awarded the coveted Kirti Puraskar by the Government of India for Best implementation of Rajbhasha among Public Sector Banks.

Environmental, Social & Governance (ESG) Practices

The objective of Corporate Social Responsibility (CSR) policy in your Bank is “to participate in activities which benefit community development, social responsibility and environmental sustainability, and reach out to socially & economically disadvantaged sections of society”. During FY2022, the total CSR spend stood at ₹204.10 crore (1% of the net profit of ₹20,410 crore for FY2021), with ₹102.56 crore allocated to the SBI Foundation. The focus areas of the Bank’s CSR activities for FY2022 included Rural and Slum area development, Health Care and Sanitation, Education, Environment Sustainability, Tribal Welfare, Empowerment of Women and Senior Citizens and supporting sports and athletes.

Your Bank has spent a total of ₹71 crore, i.e. 35% of the total CSR spends towards the fight against COVID-19.

Your Bank is also committed to adapt to the “Business Responsibility and Sustainability Report (BRSR)” framework in accordance with the directives issued by the Securities and Exchange Board of India (SEBI) in this regard.

In line with the country’s vision and global need for promoting Renewable Energy (RE), your Bank is also underwriting RE financing in a big way. The FY2022 saw the dual listing of SBI’s Green Bonds worth USD 650 million on the India International Exchange and the Luxembourg Stock Exchange. Your Bank has also shown its deep commitment to engaging with communities, NGOs and aligning with the national priorities to further environmental sustainability efforts. During the FY2022, more than six lakh trees were planted by your Bank across the country.

The time is, therefore, opportune to undertake the much-needed transformation of the Bank with an eye on emerging trends in banking, especially in India. Your Bank will thus continue to accelerate its digital agenda both in front and back offices. The scope and reach of SBI YONO will be expanded further and with enhanced user experience. In business operations, your Bank will leverage advanced analytics for deeper insights on internal data and its best possible usage. Mutually beneficial partnerships with fin-techs and NBFCs will be explored further to increase penetration and reach of the Bank.

Your bank is comfortably placed in terms of growth capital in the current year. Opportunities for lending in promising sectors such as sectors identified under PLI scheme and renewables as well as electric mobility will be explored to diversify the portfolio.

Summing up, despite the economic headwinds, your Bank has adapted well to the challenges posed by the operating environment. I am more than hopeful that the performance achieved in FY2022 will show further improvement in FY2023.

Yours Sincerely,

Dinesh Kumar Khara