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Analyst Meet / AGM - Analyst Meet

Expects advances growth of 15% for FY2015

State Bank of India

09-Aug-2014, 04:09
State Bank of India conducted an analyst meet on 08 August 2014 to discuss the financial performance for the quarter ended June 2014 and prospects of the bank. Arundhati Bhattacharya, Chairman of the bank addressed the meet:
Highlights:

Bank is focusing heavily on productivity and efficiency improvement; as a result the expense ratio has declined 296 bps yoy in Q1FY2014.

As per the bank, there are many opportunities to improve the productivity, which would help to further reduce expense ratio.

Employee cost of the bank was nearly flat, as about 7500 staff retired in the year ended June 2014. As per the bank, about 8753 staff is scheduled to retire during next one year.

Bank expects the headcount of the bank to remain flat for next two-three years. The average age of the staff stands at 44.45 years.

NIM of the bank declined 04 bps qoq to 3.13% in Q1FY2015, mainly on account of decline in overseas NIM. The MTN issue of US$ 1.25 billion conducted in Q4FY2014 was not fully deployed, which impacted the overseas NIM. Bank expects the full deployment of funds raised from MTN issue by October 2014.

Bank has reduced the bulk deposits share in total deposits to 8.36% at end June 2014 from 10.11% at end March 2014. Bank expects to reduce bulk deposits by about Rs 15000 crore in Q2FY2015.

Bank has reduced Gross NPA during Q1FY2015 with the heavy sales of stressed loans. Bank sold Rs 6000 crore of stressed assets to asset reconstruction companies (ARCs) during the quarter, of which Rs 5566 crore were in the non-performing category.

Advances growth of the bank was mainly driven by retail advances and disbursement to the existing infrastructure projects.

Bank expects advances growth of 15% for FY2015.

Bank would strive to improve the RoA to above 1.0%.

Currently, about 38.95% of the total transactions are taking place through alternate channels (such as mobile banking, internet banking). Bank proposes to raise the share of alternate channels in total transactions to 60% over next two-three years.

Bank has sufficient liquidity with itself amid weak credit demand, so does not have any plans to issue infrastructure bonds immediately.