Economic Overview

India has registered a strong recovery post pandemic with growth averaging 8.1% for the 3 year period ended FY2024. The domestic economy has continued strong momentum with real gross domestic product (GDP) expanding at 7.6% in FY2024 on the back of buoyant domestic demand. On the supply side, gross value added recorded a growth of 6.9% in FY2024, driven by manufacturing and construction activity. Inflation moderated during FY2024, with average CPI inflation at 5.4% in FY2024 as compared to 6.7% in FY2023.

The economy has showed significant resilience to the ongoing geopolitical tensions, supply side disruptions along key shipping lanes and the emergence of El Niño–Southern Oscillation during the last financial year. Major central banks in advanced economies and RBI have kept policy rates on hold in the current financial year to ensure moderating inflation align to the mandated inflation targets. With IMF projecting the world economy to continue growing at 3.2% during 2024, the growth prospects of India look promising in FY2025.

Against this backdrop, there was overall stability in the financial sector in India punctuated by brief episodes of volatility in the financial markets. The banking system saw healthy growth in advances at 20.2% during FY2024. However, with tightening of interest rates there was natural rise in the rate of interest, including the deposit rates. As a result, deposit growth lagged the advances growth for most of the year. Higher economic growth and supportive policy environment kept risks contained with most of the banks seeing healthy profits and stable asset quality.

Looking ahead, real GDP growth is projected at 7.0% in FY2025 (RBI), with economic activity backed by improving private demand, the Government’s thrust on infrastructure spending, revival in corporate investment, healthy bank credit and moderating commodity prices.

Your Bank’s Performance

During FY2024, your Bank’s business grew at a faster pace than the previous year, both in deposits and advances. The balance sheet size of your Bank has crossed `61 Lakh Crore as on March 2024. The market share of your Bank is at 22.55% in Deposits and 19.06% in Advances.

Deposits Growth

In deposits, your Bank grew by 11.13% to `49.16 Lakh Crore in FY2024, of which domestic deposits grew by 11.07% to `47.24 Lakh Crore and foreign offices deposits grew by 12.65% to `1.92 Lakh Crore. Due to the rising interest rate scenario in FY2024, term deposits grew at a robust pace of 16.38% to `27.82 Lakh Crore, while CASA deposits grew at 4.25% to `19.42 Lakh Crore. Your Bank’s CASA ratio is at 41.11% as of March FY2024 which is above the industry average of 40.08% (Dec’2023).

Advances Growth Remain Robust

With resilient economic activity, credit demand has remained strong during FY2024. Your Bank’s advances grew by 15.24% to `37.68 Lakh Crore in FY2024. Domestic loans grew by 16.26% to `32.28 Lakh Crore and foreign offices loans portfolio grew by 9.47% to `5.39 Lakh Crore. The domestic CD ratio has improved to 68.34% in FY2024.

The domestic retail advances growth is driven by SME advances growth of 20.53% to `4.33 Lakh Crore, followed by Agri Advances, which grew by 17.92% to `3.05 Lakh Crore. Corporate loans portfolio has remained strong and grew by 16.17% to `11.38 Lakh Crore. The retail personal loans grew by 14.68% to `13.52 Lakh Crore in FY2024, which is 41.9% of the domestic advances of your Bank. Among the retail personal loans, Xpress credit loans grew by 14.62% to `3.48 Lakh Crore. Home loans and Auto loans grew by 13.29% to `7.26 Lakh Crore and 19.50% to `1.17 Lakh Crore respectively during FY2024. As on March 2024, your Bank’s market share in home loans and Auto loans is at 26.5% and 19.8% respectively.

The growth in foreign offices advances is led by external commercial borrowings, Local Credit and Trade Finance business. Growth in customer credit is majorly contributed by the US, UK, the Middle East, and GIFT City branches.

Investment

Your Bank’s total investment book increased by 6.0% to `16.82 Lakh Crore, of which 96% are domestic investments. Within the domestic investment portfolio, 67.60% is in HTM category while the rest is under AFS & HFT category. The yield on investment has increased to 7.0% in FY2024 from 6.5% in FY2023.

Profitability

The stellar run in your Bank’s profitability continued during the last financial year. Your Bank declared a standalone net profit of `61,077 Crore in FY2024, registering a growth of 21.59%. The operating profit of your Bank stood at `93,797 Crore up by 12.05% from the previous year. Excluding the one-time provisions toward increase in pension at uniform rate of 50% and Dearness Relief (DR) Neutralisation, the total provisions of your Bank declined by 23.48% from their levels in March 2024.

Capital

The capital ratios of your Bank continued to improve during the financial year on the back of better planning, plough back of profit and efficient risk management of the banking book. CET 1 ratio of your Bank stood at 10.36% in FY2024 and is the highest in the last 10 years. CET 1 ratio improved by 9 bps during the year. The overall Capital Adequacy Ratio (CAR) as at the end of March 2024 stands at 14.28%, well above the minimum regulatory requirement.

With record profits in FY2024, the capital position of your Bank remains comfortable to tap future growth opportunities.

Asset Quality

The sustained focus to contain risk, well supported by broad-based recovery in economic growth, kept the asset quality robust in FY2024. Gross NPA of your Bank stood at 2.24%, an improvement of 54 bps YoY while the net NPA stood at 0.57%, an improvement of 10 bps YoY. The credit cost also fell by 3 bps to 0.29%.

The improvement in asset quality was seen across all segments, barring personal segment which saw a marginal uptick in gross NPAs. Overall, gross NPA declined to `84,276 Crore as of March 2024 from `90,928 Crore in March 2023.

Slippage, which indicates the incremental fall in credit quality during the year, increased by 10.29% to `20,317 Crore as of March 2024. Despite the rise in slippages, the slippage ratio declined by 3 bps to 0.62% in March 2024. Furthermore, marginal rise in slippages during FY2024 was more than matched by good recoveries from AUCA. The recovery from AUCA accounts stood at `6,934 Crore in FY2024. The Provision Coverage Ratio (PCR) for the bank stood at 75.02% without AUCA and at 91.89% with AUCA as of March 2024.

Technology & Innovation

Your Bank is constantly innovating itself using transformative technologies like artificial intelligence and machine learning to provide the right solutions to our diverse clientele. We are not just developing seamless digital products but also refining our processes.

Your Bank has its own private cloud named ‘Meghdoot’, designed to meet the challenges posed by the rapid technological developments, hosting 400+ applications including UPI, Kiosk Banking, DBT, Loan Management System applications, Government Business Solutions.

Financial Inclusion

Your Bank is committed to economic empowerment of all citizens through activities focusing on financial inclusion. Your Bank pioneered the BC/CSP (Banking Correspondent – Customer Service Point) model for providing Banking services, not restricted only to withdrawal payments. At present, 32 financial services are offered from these CSP outlets.

The DBT channel is also facilitating the spread of Social Security cover by way of microinsurance (PMJJBY & PMSBY) and Pension (APY) for large population who are otherwise excluded from such financial products. Your Bank is the market leader in PMJJBY, PMSBY and APY amongst all Public Sector Banks. Focus on empowerment of women has always been the key priority for your Bank and participation of females in the total enrolments covered by your Bank has been more than 50% under the Social Security Schemes. Your Bank is enhancing its lastmile reach to ensure inclusion through 82,000 plus CSPs covering most of the country’s remote locations.

Strategic New Initiatives

During FY2024, your Bank has continued undertaking strategic initiatives to achieve the long-term objectives set by the Bank. Some of the important initiatives are:

• To mobilise deposits, your Bank has launched products like: (i) SBI Green Rupee Term Deposit, which aims to mobilise deposits for financing green initiatives; (ii) SBI We Care Deposit scheme with higher interest rates extended to senior citizens; and (iii) Sarvottam (Non-Callable Deposit) Term Deposit scheme with higher interest rates for 1 year and 2 year deposits.
• To cater to the needs of different customer segments, 40 Transaction Banking Hubs (TB-Hub) were opened in the top 27 district centres across the country, for providing comprehensive solutions for transactions, payments, collections, and other financial needs.
• To tap the untapped potential and ease of customers in digital loans, your Bank has modified the Pre-Approved Personal Loan (PAPL) product and increased the maximum loan amount to `15 Lakh, offered digitally through YONO & INB in 4 clicks only. To increase the auto loans portfolio, your Bank has tied up with major car companies for offering instant in-principle sanction to customers while booking cars.
• Your Bank is one of the stakeholders of the SIDBI-led PSB consortium, with your Bank’s pathbreaking initiative, psbloanin59minutes.com, providing easy access to loans to SMEs. Instant inprinciple approval generated for eligible proposals based on GST returns, IT returns and Account Statement. Using the platform, your Bank is sourcing leads from `1 Lakh to `5 Crore. In FY2024, 17,773 leads for `10,831 Crore have been sanctioned.
• As a part of the Green Initiative towards Sustainable Development Goals, financing Rooftop Solar Photovoltaic Systems as part of the project cost is included for Home Loans and is being given due publicity to popularise the product among customers. To integrate sustainability into your Bank’s operations by switching to renewable power, a product named ‘PM Surya Ghar – Loan for Solar Roof Top’ has been designed. Further, an interest rate concession of 25 bps is provided to the builders for constructing Residential Housing projects and implementing water management, waste management and solar photovoltaic as a part of the building design under the sustainability initiative.
• Your Bank has worked strategically to reduce and control the stress in Agri portfolio and as a result, NPAs have come down during FY2024 to singledigit Agri GNPAs % for the first time. Your Bank’s Priority Sector Lending (PSL) to Agriculture segment as well as to sub-segments viz. Small & Marginal Farmers, Weaker sections and noncorporate farmers have increased substantially during the year.

Corporate Social Responsibility

The primary focus of your Bank’s philanthropic push has always been to make a meaningful and measurable impact on the lives of economically, physically and the less fortunate socially challenged communities.

For FY2024, an amount of `502.32 Crore has been allocated for undertaking CSR activities by your Bank of which, an amount of `301.24 Crore is allocated to SBI Foundation for undertaking CSR activities in project mode. Your Bank has undertaken 173 CSR initiatives in 80 Aspirational Districts during FY2024.

Various development activities were undertaken at pan India level covering all the States/UTs: (i) Upgrading Infrastructure of 232 Govt. Primary Schools, 355 Anganwadis, 158 Primary Health Centres, 75 old age homes and 57 orphanages, (ii) Distribution of 2,300 Wheelchairs to PwDs, 4,600 Sewing Machines to underprivileged women and 2.19 Lakh Sanitary Pad kits to girl children.

As a part of Swachhata Pakhwada campaign, your Bank undertook various country-wide activities including cleanliness of surroundings, beach cleaning, distribution of jute bags, organising no-plastic campaigns, construction of toilets, etc.

Your Bank has also supported the Indian Coast Guard with 6 units of remote operated self-propelled life buoy crafts, to help fishermen and others who gets trapped in the ocean currents.

Subsidiaries

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

On a consolidated basis, SBI Capital Markets Limited has posted a profit after tax (PAT) of `1,630.52 Crore for the year ended 31st March 2024 as against H725.39 Crore in the corresponding previous year. SBICAP Securities Limited (SSL), a wholly owned subsidiary of SBI Capital Markets Limited and broking arm of the SBI Group posted a PAT of `1,191.44 Crore during the year ended FY2024 as against `791.52 Crore in FY2023.

SBI General Insurance Company Limited is one of the fastest-growing private General Insurance companies in India. Against the industry growth of 12.80%, the Company achieved 15.90% increase in Gross Direct Premium amounting to `12,554 Crore in FY2024 and Gross Written Premium of `12,731 Crore. At the end of FY2024, SBI General has improved its rankings in the industry by entering the top 10 space amongst general insurers of India.

SBI Life Insurance Company Limited achieved 29.2% growth in total New Business Premium (NBP) vis-à-vis the industry growth of 2.00%. The company generated a PAT of `1,894 Crore in FY2024 against `1,721 Crore in FY2023.

SBI Cards and Payment Services Limited registered PAT of `2,408 Crore in FY2024 as compared to `2,258 Crore in FY2023.

SBI Funds Management Limited is the fastest-growing AMCs with an absolute growth of over `1.97 Lakh Crore average AUM during the quarter ended March 2024 vs March 2023. The Company posted a PAT of `2,063 Crore for FY2024 as against `1,331 Crore in FY2023.

SBI Global Factors Limited, a leading NBFC providing factoring services for Domestic and International trade, registered a turnover of `6,799 Crore for FY2024 as compared to turnover of `5,544 Crore in FY2023.

SBI Pension Funds Private Limited has earned net profit of `62.76 Crore for FY2024. The total Assets Under Management (AUM) of the Company as on 31st March 2024 is `4,33,385 Crore. The Company maintains lead position among 11 PFMs in terms of AUM with market share of 36.93%. During FY2024, the Company has onboarded 76 corporates and added 6,344 NPS subscribers.

Your Bank became the first public sector bank to form an exclusive JV i.e. SBI Payment Services Private Limited (SBI Payments) for Merchant Acquiring Business and holds 74% stake in the Company. SBI Payments continues to be one of the largest acquirers in the country with more than 33.10 Lakh Merchant Payment Acceptance Touch Points as on 31st March 2024, including 13.67 Lakh POS machines, deployed across geographies.

Awards and Recognition

In lockstep with your Bank’s constant endeavour to better the banking ecosystem through proactively adopting sustainable and globally best practices that foster value to discerning customer segments, many accolades were awarded during the year. Some of the awards and accolades received by your Bank during the year FY2024 are:

• Your Bank received the Top Performing Bank award under EASE 5.0 of PSBs Reforms Agenda. Your Bank featured among the Top 25 Strongest Brands globally for 2024 – basis Brand Finance Annual Report on most valuable and Global Brands – Global 500 2024.
• Your Bank was recognised as the Best Bank in India for the year 2023 by Global Finance Magazine at its 30^th Annual Best Banks Awards event held at Marrakech, Morocco during the occasion of 2023 IMF/WB Annual Meetings held in October 2023.
• Your Bank was awarded the Company of the Year Award – 2023 by the ET Awards for Corporate Excellence 2023. Your Bank was adjudged the Most trusted BFSI Brands 2023-24 by the Economic Times Group.
• Your Bank received the Dunn & Bradstreet Award in the Category – PSU Banks over 4 Lakh Crore assets size at the PSU & Government Summit 2023.
• Your Bank also received the ICAI Awards for Excellence in Financial Reporting Award.
• As a testimony to the unwavering blessings of 50 Crore+ SBI family members, I humbly acknowledge the honour bestowed as recipient of the Indian of the Year Award (IOTY) 2023 in the business category at CNN News18 Awards. This was not possible without your unwavering endorsement of deeds of citizen SBI.

We consider these recognitions as milestones in our journey towards constant excellence in everything we do, reaffirming your faith and trust in brand SBI and thus these are more of stepping stones for us to strive for higher goals that go on to make the society and communities around us a better place.

Way Forward

FY2024 has been a good year for the banking sector with improved business performance. However, FY2024 was not without its share of events that have reinforced the need to exercise continuous vigil. The disruption across major shipping lanes in Gulf region have implications for Indian exports and their competitiveness. The onset of El Niño– Southern Oscillation in 2023 disrupted the spatial and temporal pattern of Indian Monsoon with implications for agriculture and allied sector. This warrants proactive identification and mitigation of risk in the current financial year particularly on the climate front where regulatory guidance may come into force in FY2025.

Despite the ongoing geopolitical risks, financial market volatility and tight monetary policy your Bank’s risk management strategy worked optimally to contain the risk which clearly reflect in your Bank’s financial performance. The performance of your Bank was more than satisfactory and in some respects surpassing expectations. All the key parameters – profitability, margins, market share, risk management, strategic investment and customer centricity have improved.

Your Bank has made considerable strides in its digital offerings over the years. The benefits of investments in digital space are now visible in operating efficiency, customer experience and 24x7 accessibility of banking services. Going forward, your Bank is committed to making result-oriented investments in IT infrastructure and ensure its safety and reliability. Furthermore, efforts will be made to leverage analytics to expand business, process optimisation and risk mitigation.

We stay committed to offer excellence in customer experience, hence importance of customer centricity and long-term relationships cannot be overstated.

Climate risk which has emerged as an important area of concern has gathered considerable traction among regulators since last year. The RBI issued the Draft Disclosure Framework on Climate-related Financial Risks, 2024 in February. Keeping these developments in mind your Bank launched the Green Rupee Term deposit to mobilise funds for climate related opportunities and to fund the net-zero transition of the country as committed in Nationally Determined Contribution submitted to UNFCCC. A robust risk management framework for addressing climate risk is under process. Your Bank’s combined sanctioned limit towards renewables and sustainability projects stands at `57,532 Crore. The Bank expects that flow of funds towards green sectors will rise in coming years.

To conclude, your Bank is comfortably placed in terms of growth capital in the current year. With declining credit cost, opportunities for lending in sunrise sectors such as sectors identified under the PLI scheme, renewables as well as electric mobility will be explored to diversify the portfolio. Your Bank has innovated well to respond to the challenges by grabbing the opportunities posed by the operating environment.

I am more than hopeful that your Bank’s performance in FY2024 will continue in FY2025 too.

In the words of Mahatma Gandhi, “In a gentle way, you can shake the world.”

Yours Sincerely,

Dinesh Kumar Khara