Analyst Meet / AGM - Analyst Meet

13-Aug-2018, 11:33
State Bank of India conducted an analyst meet on 10 August 2018 to discuss the financial performance for the quarter ended June 2018 and prospects of the bank. Rajnish Kumar, Chairman of the bank addressed the call:

Highlights:

• The bank has maintained leadership position in the global banking system, while ranking at 53rd position among the top banks globally in terms of assets. It is the bank with highest operating profit in India. The bank has largest footprint globally with 1.4 lakh touch points, serving 42.5 crore customers end June 2018.
• The bank is maintaining digital leadership with share of alternate channels at 82% of transactions, while the SBI online is the world's most visited financial site.
• The bank has build strong retail liability franchise, while it is leader in generating personal loans with a portfolio size of Rs 5.59 lakh crore. The bank is leader in home loans with market share of 32% and vehicle loans with the market share of 35%.
• The bank is also leader in financial inclusion while accounting for 31.8% of PMJDY accounts opened, which are closer to achieve break even. About 60 thousand saving accounts are opened per day, while the bank expects to shift 100% account opening to YONO model which substantially reduces SBI account opening time to 5 minutes.
• All subsidiaries of the banks are performing with the life insurance subsidiary being the second largest private insurance company, while the Asset Management Company is fifth largest mutual fund in India. The credit card business is the second largest card issuer in India. The bank expects its mutual fund business to emerge as third largest in the industry in the near future.
• The domestic loan growth of the bank has accelerated to 7%, but the international loan book has declined 4% on account of decline in exposure amounting to Rs 45000 crore to local buyers credit after disallowing of LOUs by the RBI, while the bank has also transferred Rs 10000 crore of loans to new subsidiary in UK.
• The bank expects credit growth to improve in rest of the financial year, and maintained the loan growth guidance of 10-12% for FY2019.
• The bank is planning sale of 4% stake in SBI general insurance mainly for price discovery purpose.
• The bank has routed recoveries of Rs 1950 crore from interest income, which has boosted the interest income growth for the quarter ended June 2018. However, even excluding these recoveries, the bank has posted healthy growth in the interest income Q1FY2018.
• The bank is expecting provisions of Rs 900 per quarter for next to quarter for employee gratuity provisions.
• The bank is expecting heavy write back of Rs 4000 crore of provision over next two quarters relating to NCLT 1 accounts. The bank has also made strong provisions for NCLT 2 accounts with the provision coverage ratio of 79%.
• The bank has made full provision for MTM losses of Rs 5893 crore in one quarter itself, which reduces any volatility for future quarters.
• The size of total retail loan book has increased to Rs 10.22 trillion, accounting for 59.3% of domestic loan book end June 2018.
• The bank had continued consolidation in the international loan book.
• The bank has maintained the guidance of 2% credit cost as well as fresh slippage of 2% for FY19.
• The fresh slippage of loans has declined to Rs 9984 crore in Q1FY2019. About 91% of corporate slippage came from watch list.
• The non-corporate slippages came from SME at Rs 1774 crore, agriculture Rs 2566 crore, personal loans at Rs 1965 crore in Q1FY2019.
• The NPA non-fund based exposure account for 7% or Rs 13500 crore o of SME and corporate NPAs. Going forward, the bank expects the share of slippages from non-fund based exposure in fresh slippages to decline sharply.
• The bank has exhibited decline in watch list to Rs 24633 crore end June 2018 from 28989 crore end March 2018.
• The bank has transferred most of stressed assets to stressed assets management group for effective monitoring.
• The bank has exposure of Rs 3500 crore of loan in the aviation sector
• The bank had two big NPA account in the telecom sector, of which one is in NCLT and other has started making payment.
• The risk weighted assets of the bank stood at Rs 1794710 crore end June 2018
• The bank expects recovery of at least 50%in power sector NPA, while expect additional provisions of Rs 4000 crore for power sector.
• Interest income reversal stood at Rs 1200 crore
• RBI annual review for the bank included 104 accounts for the bank.

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