SBI Plans ₹25,000 Crore Fundraise, Reports Modest Profit Growth for Q1FY25

On August 3, State Bank of India (SBI) released its financial results for the April-June quarter of fiscal year 2024-25 (Q1FY25). The state-owned banking giant disclosed plans to raise up to ₹25,000 crore through Tier-1 and Tier-2 bonds this fiscal year, pending government approval.

In its regulatory filing, SBI outlined its intent to issue Basel III compliant Additional Tier 1 Bonds and Tier 2 Bonds, potentially raising funds from both domestic and international investors. The approval from the Government of India is required for this fundraising initiative.

SBI Q1 Financial Highlights:

• Net Profit: SBI reported a modest 1% increase in standalone net profit, reaching ₹17,035 crore compared to ₹16,884 crore in the same quarter last year.
• Total Income: The bank’s total income grew to ₹1,22,688 crore from ₹1,08,039 crore year-on-year.
• Net Interest Income (NII): SBI’s NII climbed 5.7% to ₹41,125 crore, up from ₹38,905 crore a year ago.
• Asset Quality: The Gross Non-Performing Assets (NPA) ratio improved significantly, falling to 2.21% from 2.76% last year. The Net NPA ratio also saw a decline to 0.57% from 0.71%.
• Operating Profit: SBI’s operating profit rose by 4.55% YoY to ₹26,449 crore.
• Return on Assets (ROA) and Return on Equity (ROE): ROA stood at 1.10% and ROE at 20.98%.
• Net Interest Margin (NIM): The bank’s NIM was reported at 3.22%, with a slightly higher domestic NIM of 3.35%.

Credit and Deposit Growth:

• Credit Growth: SBI experienced robust credit growth of 15.39% YoY. Domestic advances surged by 15.55%, driven by a 19.87% increase in Small and Medium Enterprise (SME) loans.
• Agricultural Advances: These grew by 17.06% YoY.
• Retail and Corporate Loans: Retail personal advances rose by 13.60%, while corporate loans grew by 15.92%.
• Foreign Office Advances: Advances from SBI’s foreign offices grew by 14.41% YoY.
• Deposits: Total deposits increased by 8.18% YoY, with CASA deposits growing by 2.59%, resulting in a CASA ratio of 40.70%.

Other Metrics:

• Provision Coverage Ratio (PCR): PCR, including advances under collection accounts (AUCA), stood at 91.76%, while the overall PCR was 74.41%.
• Slippage Ratio: Improved by 10 basis points YoY to 0.84%.
• Credit Cost: Reduced to 0.48% for the quarter.
• Capital Adequacy Ratio (CAR): Ended Q1FY25 at 13.86%.

SBI’s shares closed 1.72% lower at ₹847.90 on the BSE.