Latest news with #Setty
The Star
05-05-2025
- Business
- The Star
India's largest bank to raise US$3bil in share sale
MUMBAI: State Bank of India (SBI) plans to raise 250 billion rupees (US$3bil) through new shares and this fiscal year, marking the first equity raising by the state lender in seven years. Net income at the country's biggest lender fell 9.9% to 186.4 billion rupees in the three months through March, from a year earlier, according to a statement last Saturday. It managed to beat the 179.9 billion rupees average estimate of 18 analysts. The fundraising plan comes as local bank shares are trading at record highs, with the sector seen as relatively shielded from tariff-related turmoil. Private sector lender Axis Bank Ltd last month unveiled plans to raise US$6.4bil, while IDFC First Bank Ltd is raising capital from Warburg Pincus and Abu Dhabi Investment Authority. Mumbai-based SBI will raise this sum via a share sale in the year ending March 2026 in one or more trances, it said in the statement. The bank declared a dividend of 15.9 rupees per share. Peers including HDFC Bank Ltd and ICICI Bank Ltd beat quarterly profit estimates last month, driven by higher interest income. The capital raising would be based on business needs and the market conditions, SBI chairman Challa Sreenivasulu Setty in a post-earnings briefing. 'The bank has adequate capital to support growth at the current capital adequacy levels,' he said. The bank will continue accessing debt capital through additional Tier-1 and infrastructure bonds. Setty also expects India's central bank to cut its policy repo rate by another 50 basis points by March 2026, which could squeeze the bank's margins as deposits and loans are repriced. 'We have moderated our credit growth to 12% to 13% this year and system level growth could be lower at 10% to 11%,' he said. SBI's loan advances rose 12% to 42.2 trillion rupees though March from a year earlier, while deposit base climbed 9.5% to 53.82 trillion rupees. Its gross non-performing assets decreased to 1.82% from the year-ago period and was lower than the estimate of 1.98%. Loan growth for housing and business loans to small-medium enterprises will remain strong this year, while corporates are assessing the impact of the tariff wars, according to Setty. 'We have around 3.4 trillion rupees in corporate loans in the pipeline,' he said. — Bloomberg
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Business Standard
04-05-2025
- Business
- Business Standard
Will ensure RoA over 1% in FY26 despite margin pressure: SBI Chairman
The State Bank of India (SBI) will ensure return on assets (RoA) of over 1 per cent during the current financial year despite the challenge of declining rate cycle, the bank's Chairman C S Setty said. RoA is a profitability ratio that shows how much profit a company would generate from its assets. There would be further repo rate cuts during the year that would put pressure on net interest margin, he said, adding that there would be realignment of rates on the deposit side because without that effective monetary transmission will not happen. "We will ensure that the readjustment of interest rates on the deposits are aligned broadly with repo rate cuts so that margins are protected," he said while addressing analysts after announcing the SBI's quarterly numbers. "We still will be able to maintain 1 per cent RoA guidance for the current financial year... our goal is to consistently achieve an RoE of over 15 per cent through the business cycles," he said. RoA of the bank improved from 1.04 per cent to 1.10 per cent in FY25 while RoE remained flat around 20 per cent during the financial year ended March 2025. Without giving a target on NIMs, Setty said it will take up to 12-18 months for the policy rate actions to translate into the deposit costs for the bank. During FY25, the SBI's balancesheet size increased to Rs 66 lakh crore and operating profit crossed Rs 1 lakh crore and to Rs 1,10,579 crore during the financial year. SBI's net profit during the financial year also touched a record high of Rs 70,901 crore as against the previous high of Rs 61,077 crore in FY24, witnessing a growth of 16 per cent. "We continue to focus on increasing our share, our leadership in current account while maintaining the leadership position in savings deposit by further strengthening our customer service and branch network," he said. On the asset quality front, the bank has shown improvement with the gross non-performing assets (NPAs) ratio declining to 1.82 per cent and net NPAs easing to 0.47 per cent at the end of March 2025. "The asset quality of the bank has continued to remain strong over the last five years, which demonstrates the quality of our loan portfolio, the robustness of our underwriting processes, effective collection efficiency, and the leadership of the bank across business lines," he said. "For the first time you see two important ratios, the gross NPA ratio coming down below 2 per cent and net NPA ratio below 0.5 per cent and with a loan book of 42 lakh crore plus, we believe that we have done a good job on the asset quality front," he said. The fresh slippages came at Rs 4,222 crore during the quarter with a bulk of them coming from SME, agriculture and personal loan portfolios, the bank said, adding that Rs 572 crore of the loans have already been pulled back into performing advances through payments in April. The bank's board approved an enabling provision to raise up to Rs 25,000 crore in equity capital at its meeting on Saturday, Setty said, adding that it can support loan growth of up to Rs 8 lakh crore from the current buffers and it does not need capital for business growth. Overall capital adequacy stood at 14.25 per cent as on March 31, with the core buffer at 10.81 per cent, which is lower than many banks in the system. "Based on the current profitability and growth profile of the bank, we believe we have sufficient headroom to take care of business growth requirements," he said. He, however said, the bank would be open to capital raise but such action would be contingent upon business needs and market conditions.
Time of India
04-05-2025
- Business
- Time of India
Will ensure RoA over 1 pc in FY26 despite margin pressure due to easing rate cycle: SBI Chairman C S Setty
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The State Bank of India SBI ) will ensure return on assets (RoA) of over 1 per cent during the current financial year despite the challenge of declining rate cycle, the bank's Chairman C S Setty said. RoA is a profitability ratio that shows how much profit a company would generate from its would be further repo rate cuts during the year that would put pressure on net interest margin , he said, adding that there would be realignment of rates on the deposit side because without that effective monetary transmission will not happen."We will ensure that the readjustment of interest rates on the deposits are aligned broadly with repo rate cuts so that margins are protected," he said while addressing analysts after announcing the SBI's quarterly numbers."We still will be able to maintain 1 per cent RoA guidance for the current financial year... our goal is to consistently achieve an RoE of over 15 per cent through the business cycles," he of the bank improved from 1.04 per cent to 1.10 per cent in FY25 while RoE remained flat around 20 per cent during the financial year ended March giving a target on NIMs, Setty said it will take up to 12-18 months for the policy rate actions to translate into the deposit costs for the FY25, the SBI's balancesheet size increased to Rs 66 lakh crore and operating profit crossed Rs 1 lakh crore and to Rs 1,10,579 crore during the financial net profit during the financial year also touched a record high of Rs 70,901 crore as against the previous high of Rs 61,077 crore in FY24, witnessing a growth of 16 per cent."We continue to focus on increasing our share, our leadership in current account while maintaining the leadership position in savings deposit by further strengthening our customer service and branch network," he the asset quality front, the bank has shown improvement with the gross non-performing assets (NPAs) ratio declining to 1.82 per cent and net NPAs easing to 0.47 per cent at the end of March 2025."The asset quality of the bank has continued to remain strong over the last five years, which demonstrates the quality of our loan portfolio, the robustness of our underwriting processes, effective collection efficiency, and the leadership of the bank across business lines," he said."For the first time you see two important ratios, the gross NPA ratio coming down below 2 per cent and net NPA ratio below 0.5 per cent and with a loan book of 42 lakh crore plus, we believe that we have done a good job on the asset quality front," he fresh slippages came at Rs 4,222 crore during the quarter with a bulk of them coming from SME, agriculture and personal loan portfolios, the bank said, adding that Rs 572 crore of the loans have already been pulled back into performing advances through payments in bank's board approved an enabling provision to raise up to Rs 25,000 crore in equity capital at its meeting on Saturday, Setty said, adding that it can support loan growth of up to Rs 8 lakh crore from the current buffers and it does not need capital for business capital adequacy stood at 14.25 per cent as on March 31, with the core buffer at 10.81 per cent, which is lower than many banks in the system."Based on the current profitability and growth profile of the bank, we believe we have sufficient headroom to take care of business growth requirements," he however said, the bank would be open to capital raise but such action would be contingent upon business needs and market conditions.
The Print
04-05-2025
- Business
- The Print
SBI Q4 profit declines as margins fall; expects tariffs to impact loan growth in FY26
The core net interest income of the bank increased 2.69 per cent to Rs 42,775 crore despite a loan growth of over 12 per cent due to a lower net interest margin. NIM declined by 32 basis points year-on-year to 3.15 per cent. On a standalone basis, the net profit of the country's largest lender declined to Rs 18,642 crore in the March quarter from Rs 20,698 crore in the year-ago period. Mumbai, May 3 (PTI) State Bank of India on Saturday reported an 8.34 per cent decline in its consolidated net profit to Rs 19,600 crore for the January-March quarter compared to Rs 21,384 crore a year ago, impacted by a decline in net interest margins. Total income on consolidated basis, however, increased to Rs 1,79,562 crore in the last quarter of FY2024-25 (FY25) from Rs 1,64,914 crore in the year-ago period. SBI chairman C S Setty said the NIMs (net interest margin) will continue to be under pressure in the new fiscal year, especially with the policy rate cuts by RBI given the fact that 27 per cent of its loans are linked to the repo. Without giving a target on NIMs, Setty said it will take up to 12-18 months for the policy rate actions to translate into the deposit costs for the bank, and stressed that policy transmission will only be complete when the costs of both the assets and liabilities reprice. Setty said that the net profits are down because of a one-off item which had benefited the bank's financials in the year-ago period. The bank is targeting a 12-13 per cent loan growth for the new fiscal, Setty said, admitting that there will be an impact of the tariff wars on the credit growth as well. He said companies will go slow on their investment plans because of the uncertainties in the global economy induced by the shifts in trade policies, which will have an impact on the credit growth for banks. At present, SBI has a corporate loan pipeline of Rs 3.4 lakh crore, split evenly between loans sanctioned earlier but yet to be disbursed and conversations on future requirements. The bank's managing director Ashwini Kumar Tewari said demand for credit is coming from the infrastructure, renewable energy, data centres and commercial reality segments. The other income for the bank rose to Rs 24,210 crore in the March quarter of FY25 from Rs 17,369 crore in the year-ago period. During the reporting quarter, corporate loan growth moderated to 9 per cent on prepayments done by corporates to either deleverage balance sheets or as they raised new equity, Setty said, adding that retail personal credit grew 11 per cent which included a 14 per cent growth in home loans. The bank grew the unsecured personal loans at 0.49 per cent in FY25, and Setty said the bank will push the pedal on this product as it does not see any challenges on it. On the asset quality front, the gross non-performing assets ratio further improved to 1.82 per cent, and Setty said this is the fifth consecutive year of an improvement in the number. He said the bank expects asset quality to be benign for many more years now as no stress is seen from large-value corporate loans, and added that the ratio will continue to be under 2 per cent level. The fresh slippages came at Rs 4,222 crore during the quarter with a bulk of them coming from SME, agriculture and personal loan portfolios, the bank said, adding that Rs 572 crore of the loans have already been pulled back into performing advances through payments in April. The overall provisions shot up to Rs 6,441 crore from Rs 1,610 crore in the year-ago period, and Setty explained that a bulk of the money set aside was for ageing advances. The bank's board approved an enabling provision to raise up to Rs 25,000 crore in equity capital at its meeting on Saturday, Setty said, adding that it can support loan growth of up to Rs 8 lakh crore from the current buffers and it does not need capital for business growth. Overall capital adequacy stood at 14.25 per cent as on March 31, with the core buffer at 10.81 per cent, which is lower than many banks in the system Setty said the bank has received the Supreme Court order on the Bhushan Power case, and pointed that the committee of creditors is studying the order. For the entire 2024-25 financial year, the bank reported a 16 per cent increase in standalone profit to Rs 70,901 crore against Rs 61,077 crore in the previous year. The bank's board has declared a dividend of Rs 15.90 per equity share for FY25. Setty said that the bank will hire 18,000 people in FY26, the largest number in a decade. This will include 13,400 clerks, 3,000 probationary officers and 1,600 specialist officers for roles like technology, he said. PTI AA MR MR This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
Business Times
04-05-2025
- Business
- Business Times
India's largest bank plans to raise 250 billion rupees in share sale
[MUMBAI] State Bank of India, or SBI, plans to raise 250 billion rupees (S$3.8 billion) through new shares and this fiscal year, marking the first equity raising by the state lender in seven years. Net income at the country's biggest lender fell 9.9 per cent to 186.4 billion rupees in the three months to March, from a year earlier, according to a statement on Saturday (May 3). It managed to beat the 179.9 billion rupees average estimate of 18 analysts. The fundraising plan comes as local bank shares are trading at record highs, with the sector seen as relatively shielded from tariff-related turmoil. Private sector lender Axis Bank last month unveiled plans to raise US$6.4 billion, while IDFC First Bank is raising capital from Warburg Pincus and Abu Dhabi Investment Authority. Mumbai-based State Bank of India will raise this sum via a share sale in the year ending March 2026 in one or more trances, it said. The bank declared a dividend of 15.9 rupees per share. Peers including HDFC Bank and ICICI Bank beat quarterly profit estimates last month, driven by higher interest income. The capital raising would be based on business needs and the market conditions, SBI chairman Challa Sreenivasulu Setty in a post-earnings briefing. 'The bank has adequate capital to support growth at the current capital adequacy levels,' he said. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The bank will continue accessing debt capital through additional Tier-1 and infrastructure bonds. Setty also expects India's central bank to cut its policy repo rate by another 50 basis points by March 2026, which could squeeze the bank's margins as deposits and loans are repriced. 'We have moderated our credit growth to 12 to 13 per cent this year and system level growth could be lower at 10-11 per cent,' he said. SBI's loan advances rose 12 per cent to 42.2 trillion rupees to March from a year earlier, while deposit base climbed 9.5 per cent to 53.82 trillion rupees. Its gross non-performing assets decreased to 1.82 per cent from the year-ago period and was lower than the estimate of 1.98 per cent. Loan growth for housing and business loans to small-medium enterprises will remain strong this year, while corporates are assessing the impact of the tariff wars, according to Setty. 'We have around 3.4 trillion rupees in corporate loans in the pipeline,' he said. 'From what we are seeing, companies are not stepping away from their investment plans.' BLOOMBERG
