State Bank of India’s (SBI’s) standalone profit in the January-March quarter of FY23, declared on Thursday, grew by 83.19 per cent to a record Rs 16,695 crore on the back of healthy net interest income (NII) and lower provisions. The previous best quarterly profit was Rs 14,205 crore in Q3FY23.
For the full financial year 2022-23, the bank’s standalone net profit grew 58.58 per cent to Rs 50,232 crore. The standalone numbers represent the banking operations of SBI.
SBI’s consolidated net profit was up 57.31 per cent at Rs 55,648 crore in 2022-23. This is the second-highest reported profit among listed companies that have announced their earnings so far — after Reliance Industries’ Rs 66,702 crore — and almost Rs 10,000 crore ahead of HDFC Bank’s Rs 45,997 crore.
SBI had reported a consolidated net profit of Rs 35,374 crore in FY22.
“For the third quarter running we have posted the highest ever quarterly [net] profit. For the full year our [net] profit is the highest ever by any bank in India,” said Dinesh Khara, chairman, in the post-earnings interaction with the media.
The board of directors has declared a dividend of 1,130 per cent — Rs 11.30 per share (of Rs 1 each) — for FY23, the SBI informed the BSE. Its shares closed 2.11 per cent lower at Rs 574.15 per share.
The public-sector lender’s NII, that is interest revenues minus interest expenses, grew 29.47 per cent year-on-year (YoY) to Rs 40,393 crore in Q4 FY23 as against Rs 31,198 crore in Q4 FY22. The net interest margin (for domestic operations) improved to 3.84 per cent in Q4 FY23 from 3.44 per cent in Q4FY22.
“NII increased on the back of improvement in yields and credit off take,” Khara said.
Referring to the net interest margin (NIM) trajectory in FY24, Khara said there was room for the marginal cost of funds-based lending rate (MCLR) to go up, which could boost margins. The MCLR is a benchmark for pricing corporate credit.
Non-interest income rose to Rs 13,961crore in Q4FY23 from Rs 11,880 crore in Q4FY22.
The bank’s operating expenses grew 27.27 per cent YoY to Rs 29,733 crore in Q4FY23. This reflects the impact of provisions for upcoming wage revisions in the banking industry. SBI is making a provision of Rs 500 crore each month for wage revision.
Advances grew 15.99 per cent YoY to Rs 32.69 trillion in FY23. Growth in advances was driven by retail loans (17.64 per cent) followed by small and medium enterprises.
J Swaminathan, managing director (corporate banking), said corporate loan growth was expected to remain robust across sectors like roads, ports, and aviation. Khara said there was a pipeline of Rs 1.75 trillion of corporate credit, in addition to Rs 1.78 trillion of sanctions, which are awaiting disbursement.
The corporate loan book is expected to grow 10-12 per cent in FY24.
As for liabilities, the deposits increased by 9.19 per cent YoY to Rs 44.23 trillion. The share of low-cost money — current account and saving accounts (CASA) — in domestic deposits stood at 43.8 per cent at the end of March 2023, down from 45.28 per cent a year ago.
While the bank did not spell out an estimate for deposit growth in FY24, Khara said it would be able to raise adequate resources to meet credit demand and would not require aggressive deposit mobilisation. Also, the bank has excess statutory liquidity ratio (SLR) securities of Rs 4 trillion and part of it can be monetised to raise resources.
Its capital adequacy ratio (CAR) stood at 14.68 per cent with common equity tier of 10.27 per cent at the end of March.
SBI Life Insurance’s net profit grew to Rs 1,721 crore in FY23 from Rs 1,506 crore in FY22. Another subsidiary, SBI General Insurance, posted a net profit of Rs 184 crore in FY23, up from Rs 131 crore in FY22. The mutual fund subsidiary posted a net profit of Rs 1,331 crore in FY23, up from Rs 1,071 crore in FY22.
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Shriram Life Insurance has posted a net profit of Rs 156 crore in FY23, on the back of strong growth in individual non-single premiums. During the financial year 2021-22, its net profit was a mere Rs 3 crore and was Rs 106 crore in 2020-21.
For the year-ended March 2023, Shriram Life posted a retail APE (annual premium equivalent) growth of 24 per cent YoY, underscoring faster growth than the total industry for Individual New Business APE. For the period April 2022 to February 2023, while private industry grew 19 per cent on Retail APE, Shriram Life showed stable growth at 22 per cent. Even as private industry experienced an additional boom in March owing to the Budget announcement on taxation of higher premiums, Shriram Life continued to report steady growth at 31 per cent (for March 2023), the company said in a statement.
The company, promoted by Shriram Group and South Africa’s Sanlam Group, progressed in its purpose to provide life protection cover among communities that need it the most. The company sold 2,90,156 policies in FY23. Including group business SLIC provided life cover to over 5.3 million new lives during the year. Shriram Life sources 45 per cent of its retail business from the rural sector.
The company saw a 9 per cent increase in renewal premium to Rs 1,394 crore alongside a 17 per cent rise in AUM at Rs 9,012 crore. In FY22, the company’s AUM stood at Rs 7,683 crore while Profit After Tax (PAT) saw a dent at Rs 3 crore, due to the impact of the pandemic. Claims settlement for individual policies improved more than 100 basis points to 97.4 per cent, with over 91 per cent of its non-investigated claims (claims arising after three years of policy inception) settled through the Rapid Claims Settlement process that includes claim settlement within 12 hours.
Approximately 48 per cent of Shriram Life’s retail claims were from the rural segment. “Our growth has advanced thanks to the adoption of technology and innovation, enabling more rural policy holders to complete their paperless statement. We’ve strengthened our digital capabilities with a focused approach to solve customer needs and, at the same time, maintain engagement with our customers,” said Casparus J Kromhout, Managing Director and CEO, Shriram Life.
“We saw the regulator introduce critical reforms that had a positive impact on the industry. The industry is at a stage with high potential to grow due to diverse market demographics, increasing awareness and technological advancements. Shriram Life looks forward to continuing the growth momentum in the coming years and continue its purpose to provide life insurance protection to more families in the rural segment,” he added.
The policy-mobilizing agents’ app Astra, chatbot ShriA, and the latest addition — Shriram Smart Suraksha Card — along with e-KYC face authentication have enabled Shriram Life’s customers to seamlessly experience premium renewal, access policy bond or even buy fresh policies, it said. Shriram Life’s Smart Suraksha Card is set to drive paperless insurance, helping users to renew premiums by way of QR code and retrieve policy bond data which users can carry around with them.
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