Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
State Bank of India (NSE: SBIN) Q4 2026 Earnings Call dated May. 08, 2026
Corporate Participants:
Pawan Kumar Kedia — General Manager, Performance Planning and Review Department
Shri Challa Sreenivasulu Setty — Chairman
Ashwini Kumar Tewari — Managing Director, Corporate Banking and Subsidiaries
Rama Mohan Rao Amara — Managing Director, International Banking, Global Markets & Technology
Analysts:
Ashok Ajmera — Analyst
Kunal Shah — Analyst
JAY MUNDRA — Analyst
Unidentified Participant
Pritesh Bumb — Analyst
Unidentified Participant
Unidentified Participant
Sushil Choksey — Analyst
Piran Engineer — Analyst
Anand Dama — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Nitin Aggarwal — Analyst
Presentation:
Pawan Kumar Kedia — General Manager, Performance Planning and Review Department
Good evening ladies and gentlemen. I am Paman Kumar, General Manager, Performance Planning and Review department of the Bank. On behalf of State bank of India, I’m delighted to welcome the analyst in investors, colleagues and everyone present here today on the occasion of the declaration of the financial year 26 results of the Bank. I also extend a very warm welcome to all the people who are assessing the event through our live webcast. We have with us on the stage our Chairman Sir Shri CS Our Managing Director, Corporate Banking and Subsidiaries, Sri Ashwini Kumatiwari.
Our Managing Director, International Banking, Global Markets and Technology Sri Rana Ashutosh Kumar Singh. Our Managing Director, Retail Business and Operations, Sri Ram Mohan Rao Amara, our Managing Director, Risk Compliance and Saji Sri Ravi Ranjan, our Deputy Managing Director, Finance Sri Aninder Sundarpal. Our Deputy Managing Directors heading various verticals and Managing Directors of our subsidiaries are seated in the front rows of this hall. We are also joined by Chief General Managers of different verticals business groups.
Chief General Managers and other senior officials of the circles and various offices are connected through our live webcast. To carry forward the proceedings, I request our Chairman sir to give a summary of the Bank’s financial year 26 performance and a strategic initiatives undertaken. We shall thereafter straight away go to questions and answer session. However, before I request Chairman Sir, I would like to read out the Safe harbor statement. Certain statements in today’s presentation may be forward looking statements.
These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual outcomes may differ materially from those included in these statements due to a variety of factors. Thank you. Now I would request Chairman sir for his opening remarks. Chairman sir, please.
Shri Challa Sreenivasulu Setty — Chairman
Good evening ladies and gentlemen. Thank you for joining us for today’s analyst meet for following our Q4 and FY26 results. At the outset, I would like to state that our FY26 performance reflects a consistency born out of a calibrated multi year shift in how we run the bank. We have focused on strengthening our core fundamentals of asset quality, capital operating efficiency and franchise depth. The result is a balance sheet that is performing robust and resilient. Let me briefly touch upon the environment we are operating in.
The global economy remains in a phase of elevated uncertainty with growth projected by the IMF at 3.1% in 26 and 3.2% in 27. India however continues to outperform with FY27 growth projected at 6.9% by the RBI supported by domestic demand and macro stability. That said, geopolitical developments and climate related disruptions remain key risks. Inflation is expected at 3.8% in the near term with a full year estimate of 4.6% with some upward bias on account of energy price movements and weather related uncertainties.
From a banking system perspective, credit growth for scheduled commercial banks accelerated to 16% in financial year 26 while deposits grew at 13.6%. The momentum is continuing in the current financial year and we expect credit growth at 13 to 14% and deposits at 11 to 12% for FY27. For the system, asset quality continues to remain strong and capital buffer is comfortable. However, beyond these metrics the operating landscape is being reshaped by deeper structural shifts. Technology risk is now becoming a systemic risk.
The emergence of advanced AI models capable of identifying and exploiting vulnerabilities at scale has fundamentally changed the cybersecurity paradigm. The industry is therefore moving towards coordinated system wide resilience frameworks in partnership with the regulators, the government and other key stakeholders. At the same time, the regulatory approach to risk is becoming more forward looking. The transition to expected credit loss based provisioning from April 2027 is a significant step in that direction and we are confident of a smooth transition in this environment.
Our approach is focused not merely on growth but but in improving the quality of our growth by making it more durable, capital efficient and more resilient across cycles. This is being executed through a set of aligned actions. We are simplifying the bank at scale through Project SARAL which I mentioned earlier with you our operations process reengineering initiative. The larger objective is to simplify the customer journey and release capacity within the system to focus more on relationship building and business growth.
Second, we are building a more digital native intelligence led organization through analytics, 2.0 data and AI are becoming central to decision making across credit risk and customer engagement. Third, we are strengthening our liability franchise as savings increasingly shift towards market linked instruments. We are deepening customer engagement through yono, expanding ecosystem partnerships and creating relevant offerings for diverse segments. Our balance sheet strategy is moving from volume led expansion to a value accretive growth with a sharper focus on granularity, product competitiveness and risk adjusted returns.
We are also expanding into new growth areas including startups, alternative investments, ecosystems and global trade to keep our portfolio diversified and future ready. Against this backdrop let me now highlight the bank’s Q4 FY26 performance driven by strong operating profitability and improved asset quality. I am glad to share that the bank has surpassed key milestones this financial year Net Profit reached a record high at 80,032 crores up 12.88% year on year supported by 11.25% year on year growth in operating profit with a domestic NIM at 3.03% supporting our guidance to maintain NIM above 3% as total business crosses the 109 trillion mark.
This performance showcases our strengthening market position and sustained customer trust. Our domestic business has grown by more than 11 trillion rupees on year. On year basis our balance sheet size has crossed 76 trillion rupees. We achieved resilient deposit growth of 11.03% year on year by about 6 trillion rupees driven by strong inflows in retail term deposits which grew by 14.77% and a double digit savings account growth at 10.6%. Despite competitive environment, a 39.46% CASA ratio which is an improvement of 33 basis point quarter on quarter sustains our low cost funding Advantage reinforced by 12.7% growth in foreign deposits.
The credit growth has been robust and was up 16.87% year on year as on March 26 which was driven by all the segments registering double digit growth. The domestic credit deposit ratio was 73.08% at the end of FY26, an improvement of 337 basis points year on year all the components of RAM have witnessed sound growth. The corporate credit growth momentum continues and grew by 14.83%. Our foreign offices have continued to perform well with growth in advances at 20% year on year. In dollar terms it is 8%.
The asset quality continues to be industry leading with gross NPAs at 1.49% improving by 33 basis point and net NP at 0.39% further improving by 8 basis point on year. On year basis the PCR was at 74.36%. The sustained 2 decadal low in NPAs validate our rigorous underwriting capability, disciplined credit practices and effective credit risk management, strengthening our capital position. Our CIR has improved by 115 basis point year on year and stands at 15.4% which is well above the regulatory requirements.
The bank has enough headroom to address future credit growth requirements. Further, our subsidiaries are demonstrating consistent performance and are driving stakeholder value through digital expansion, product innovation and improved customer experience. We will continue to nurture these subsidiaries and see them creating value for their own shareholders as well as the shareholders of sbi. At sbi, digital transformation remains a continuous journey where YONO is central to our strategy. The strong adoption of a New Yono Crossing 4 crore registration within 3 months of launch and bringing total users above 10 crores confirms that digital first banking is now deeply embedded in customer behavior.
66% of new savings accounts originating on YONO platform in FY26 demonstrates our successful transition to a digital first institution. Our FY26 performance reflects both a strong foundation and the strategic repositioning. In an environment of intensifying liability, competition, evolving customer expectations and rapid technological changes, we are reshaping our balance sheet, strengthening liabilities, embedding AI and analytics into our operating model and diversifying funding sources and growth ecosystems.
Our focus remains firmly on delivering consistent risk adjusted returns supported by disciplined underwriting, strong asset quality and robust internal capital generation. Our emphasis has always been on efficiency and return metrics with our ROE consistently greater than 1% and ROE at 18.5% at the end of Q4 FY26, our ability to maintain an ROE greater than 1% at scale puts us in a top league of global financial institutions with an advances book of more than 49 trillion rupees, investments about 18 trillion rupees, deposits of more than 59 trillion and a balance sheet size of nearly 76 trillion.
Most importantly, we are empowering our people with continuous training and inclusive culture to build a motivated future ready workforce in this dynamic environment. To conclude, we see SBI journey as a closely aligned with India’s long term economic transformation. As the country progresses towards the vision of Vixit Bharat 2047, we believe SBI has a unique role to play as a key enabler. Thank you once again for your continued engagement and support. My team and I will now be happy to take your questions.
Pawan Kumar Kedia — General Manager, Performance Planning and Review Department
Thank you Chairman Sir. We now invite questions from the audience for the benefit of all. We request you to kindly mention your name and company before asking the questions. To accommodate all the questions we request you to restrict your questions to maximum two at a time. Also kindly restrict your questions to the financial results only and no questions be asked about specific accounts please. In case you have additional questions, the same can be asked at the end. We now proceed with the question and answer session please.
Thank you.
Questions and Answers:
Ashok Ajmera
Yes sir, Definitely compliments to you sir. For such a robust business growth, very good asset quality and if you see on year on year the highest operating profit and the net profit, net profit going beyond 80,000 crores. There is only a few concerns looking at the result on the face of it of this quarter where our operating profit also has gone down and the net profit also has gone down as compared to the last quarter and Mainly dragged the profitability dragged by the treasury operation, the loss and the trading maybe a trading loss or a loss on the valuations of the treasury book I think which is about 3,500 crore and little bit increase in the overhead expenses in this quarter which may be because of the last quarter it has gone up by about 1500, 1700 crore the overheads.
So having said that our slippage has also gone up little bit in this quarter. Maybe 1200 crores up in this quarter. So in this scenario now with the treasury outlook looking little better in the coming quarters and over it may be one time because of the last quarter of the financial year. Can I, can we have some idea of going forward? Where do we stand on the profitability front while the loan book is growing? Very well but you yourself said that we can look at still about 14 to 16% growth in the credit book.
So looking at this scenario now coming forward can we have the comfort of having if not good income from treasury at least the losses are not there so that the overall profitability increases and coupled with that now with the ECL guidelines getting finalized how are we prepared with that? Is there impact is going to be taken up in the in the coming quarters whether the numbers have been drawn and what is our plans to take care of that those provisions viz. Now as far as the business growth is concerned with the emergency line of Credit Guarantee Scheme 5 coming up with 2:50,000 crore.
5,000 is for airlines separately. So even business growth. You yourself have said in some of the interviews that 70 80,000 crores of prospects are there only through this line of credit looking at your customer base. So in all can you just give your views on the few points which I have raised sir, in this
Shri Challa Sreenivasulu Setty
As you said few points is it okay. But very comprehensive assessment what you’ve done. First of all I think a few questions which are in your mind. Let me first answer them in terms of there seems to be some amount of maybe we were not communicated enough in our Q3. I believe I’ve gone through my transcript again. In Q3 analyst call we made it very clear that our exit nim is going to be 3%. And we also mentioned that in the Q3 December 15th repo rate cut will be having full impact in the Q4 and these things are something what we stated upfront, what has not been known to all of us is the yield movement which had definitely impacted the treasury income.
But even then what we realized that despite the sharp movement in the bond yields because of our very low exposure To Fair Value portfolio. Our hit has not been very significant. But you are comparing with the Q4 of the previous year. For instance we have had 3800 crores one time gain on these security receipts. Apart from that we had positive treasury gains in that quarter. I think overall we all believe that we have given a good set of numbers for Q4 as well as full year and we stuck to our guidance in terms of 1% ROA and 3% exit NIM.
I don’t think there was any surprise to us but I think there is some assessment in terms of what analysts like you have done on the NI part. There are two reasons why then net interest income has got impacted. As I mentioned. One is the impact of 25 basis point rate cut which is reflected in the eblr portfolio and 5 basis point cut which we have done in the MCLR is fully Factored in the Q4 and EBLR book also has gone up. In fact the composition of the floating rate loans slightly has increased. That also is a combination of factors which we had known and that is the reason we always gave a guidance that when we talk about NIM we are not talking about on the quarterly NIM numbers.
It is a full year exit NIM which we have given the guidance and I hope that we broadly fulfill that. I think this is something what I wanted to clarify. And as for the treasury going forward, I think three, four questions which you asked. Let me answer in the senior seriatum. One is slippages. Slippages of, you know, Q4 slippages is not a matter of concern and we have from this slippages we pulled back almost 850 crores as we speak. That means there is no structural issue in terms of asset quality.
Let me assure you on that.
Ashok Ajmera
So there’s no impact of West Asia so
Shri Challa Sreenivasulu Setty
Far. And this slippages has nothing to do with any stress in the system. It is seasonal. Most of the slippage have come from agriculture and some from SME. I will give further guidance as we speak in terms of slippages. But we are sticking to our credit cost guidance of 50 basis points. Even despite what whatever happens on the West Asian conflict we are confident that asset quality is holding up. Unless of course there is something dramatically happens in the system and macros will further get disturbed.
As things stand now we are sticking to our credit cost guidance of 50 basis point, our credit growth guidance of 13 to 15% and you mentioned about treasury income and we believe that the yields will not create much pain going forward even if Assuming that the yield movement will be there. Our internal guidance which has gone wrong earlier, we felt that the bond yields probably would be moving up to 6.75. There has been a sharp movement but now also our treasury holds a view that it would be in the range of 6.75 to 6.9, not beyond that unless the best station conflict or any other fiscal imbalances create a problem.
ECL GUIDELINES Before ECL guidelines, let me also talk about ECLGS which is a proactive and preemptive measure in my view. A lot of people ask me are there any customers who are coming and asking for ECLGs? Not yet. It will take about eight to nine days, eight to 10 days for us to operationalize these guidelines and we are reaching out to customers in case of any need they have this facility available. My assessment of 70,000 to 80,000 crores is the full limit which is available to MSMEs and other non MSME customers.
But our assessment also indicates that not more than 30 in the worst case 30, 40% people will be utilizing it. It could be more as the conflict goes further but it is an excellent step from the Government of India side to make this available in a proactive measure. ECL GUIDELINES we have made the models ready based on the draft guidelines. We are further tweaking the models based on the final guidelines. It would not be appropriate for me to give a number at this juncture. I think probably after the end of June quarter we will have much clarity in terms of what is the stock which will create which which is required to be taken care of.
Ashok Ajmera
But approximately you have about 29,000 30,000 crore buffer already. I
Shri Challa Sreenivasulu Setty
Don’t want to hazard, I guess at this juncture. Let us stick to that. We are not going to give any number at this time. But one thing I want to make it very clear as I made earlier also that this transition is going to be smooth. It is not going to impact our ability to fund credit growth. It will not be impacting our capital ratios as much and I hope we will be smoothly transitioning in the next four years in terms of the ECL guidelines implementation. I hope I answered all your questions. Yes,
Ashok Ajmera
Okay, thank you sir.
Kunal Shah
Hello sir. So I had a couple of questions. Firstly just one clarification. In NII we do not have any impact whatsoever of any forex translation or any forex laws Because I remember years ago in a Covid quarter we had some NII issues relating to forex as well. So just wanted to clarify that. No, it’s a. It’s a core
Shri Challa Sreenivasulu Setty
NI except that you know the usual tax interest on tax refund which has come around thousand crores which is added in NII but it is partially offset because some of the penal interest which used to be booked in part of interest has moved to penal charges
Kunal Shah
But
Shri Challa Sreenivasulu Setty
That is just about 600 crores. It is purely the impact of EBLR and some of the floating rate loans on the corporate side.
Kunal Shah
Okay so basically the interest on tax refund is 10 billion versus around 7 billion last quarter
Shri Challa Sreenivasulu Setty
I think it is 800. Yeah, 7.7. 760. Correct.
Kunal Shah
Yeah, 760. Okay. And then sir, just in terms of margins, right? So what is your outlook on margins near term and longer term as well? Because this quarter we did see that NIM’s global NIM in the quarter declined around 18 bips. So what is the outlook going ahead? Maybe first half and then you know, longer term also.
Shri Challa Sreenivasulu Setty
But I would like to give guidance for the full year Maru and as I promised I said that I’ll give first year, first quarter itself, the full year guidance
Ashwini Kumar Tewari
And
Shri Challa Sreenivasulu Setty
We do not want to create confusion in terms of quarterly guidances
Ashwini Kumar Tewari
Because
Shri Challa Sreenivasulu Setty
The quarterly in a large book like ours there is a seasonality, there is, you know, momentum of credit growth. It is very difficult to give a guidance on the quarterly basis. We are still giving a guidance on an annual basis. We are sticking to our NIM of more than 3%
Kunal Shah
For the, for the full year. For the
Shri Challa Sreenivasulu Setty
Full year.
Kunal Shah
Okay. Okay sir. And if you could give the breakup of GROSS Slippage for Q4.26 and Q3 26. So that’s one question and the other question I had is that what is your total Middle east portfolio and what is the India linked Middle east portfolio? Portfolio like some Indians working abroad may have taken home loans etc so both if you could give some sense of that.
Shri Challa Sreenivasulu Setty
So I’ll answer the second question first. I think that answers many people’s minds. You know what is happening on the Middle East. See the, the Middle east we have two large offices, Bahrain and DIFC Dubai. But the other operations are very small Baron retail operations and Dubai we don’t have any retail operations at all. So primarily it is a wholesale book and out of this it is predominantly either a bank exposure or a sovereign exposure and in both these cases we do not see any concern on that and we don’t have any much direct exposure either to the medium enterprises or even corporates.
So I don’t see the great impact coming from the corporate side wholesale book side on the retail Side where the people working in the GCC taking the housing loans it is predominantly in Kerala. The rest of the country is not concentrated. But we have not seen any impact on the asset quality particularly on the housing loans they normally take. Housing loan and lot of people what we have realized that they have not come to Kerala back. They’re still staying put in the in the place where they’re working.
And there is no asset quality concern at this juncture. And because most of the GCC countries are coming to a normalcy we had moved our people from the GCC countries to India to work from Mumbai. But all of them have gone back now barring a few one or two. So which means that the things are stabilizing. It will take some time but I don’t think it will lead to any concerns on the asset quality. The first question on the
Kunal Shah
I wanted the slippage breakdown. Gross gross
Shri Challa Sreenivasulu Setty
Slippages anyway we don’t ever give. Is always first quarter which gives grass slippages and subsequently it is all net slippages. But there’s absolutely no any predominant movement of any concern in the slippages.
Kunal Shah
And so what will be that India linked proportion of portfolio the Kerala home loans very
Shri Challa Sreenivasulu Setty
Small.
Kunal Shah
Okay. Thank you sir. Thanks a lot.
Shri Challa Sreenivasulu Setty
You want anything ashutosh on the.
Rama Mohan Rao Amara
What you said is right sir. So absolutely no concern as of now for us the the branches we have in Dubai and Bahin like Chairman said is wholesale banking business mostly we do and tel is mostly non fund based business. Guaranteed we issue for Indian essentially the difference. So the corporate book what we have is 98% plus is either sovereign or banks or sovereign related exposures. So we are not. We are not concerned about any corporate exposure in Middle east for these three branches globally also exposure we have the India’s link total exposure will be 1012 billion including trade finance and all.
But you are not seeing any concern on that side.
JAY MUNDRA
Sir. Hi jay Mundra from ICICI securities. Sir on your this FY27.3% plus NIM guidance that is domestic or the global one. Just to. Just to clarify.
Shri Challa Sreenivasulu Setty
So our guidance is generally domestic. We are not giving wholesale. I mean full bank NIM ever. Because see the overseas book is a different creature altogether. We talking about domestic names and
JAY MUNDRA
Sir within this so let’s say there are two parts. One is yield and one is cost of funding or cost of deposit. If I calculate this quarter right so yield on interest on advances they have been flat right or 0.4% increase whereas advances have grown by 5% QoQ in last quarter also they were 5% so average basis also they should be around 5%. So what explains the decline? If I calculate this way, the yield on advances they’ve declined by around 30 basis point
Shri Challa Sreenivasulu Setty
One
JAY MUNDRA
Is of course the repo rate movement. But apart from that is there anything else which could linger? Because hopefully the repo rate movement ends here, right? Correct. So what is your thought process on yield on advances going ahead? Would they be similar, stable and hence, you know. Yeah,
Shri Challa Sreenivasulu Setty
Yield advances probably would have some uptick. What happened in the Q4 apart from the EBLR movement? See your EBLR plus floating rate loans in other than MCLR in Corporate book was 43% Previous year is moved to 49% that movement also actually creates. So assuming that our house views that the reported cut is unlikely this year reported movement is going to be stable which means that whatever we see on the spreads will remain. And on the corporate side we are seeing how we can change the asset mix and reduce the floating linked to T bill essentially and bring back the yields to normalcy.
And much of the loans we have already started moving to MCLR in the corporate side all loans which are getting repriced or refinanced are renewed today are predominantly moving to the MCLR and reduce the floating T bill rate linked loans. That gives us confidence one is the repo rate being stable. There is no movement on the EBLR side and the corporate book which moved significantly towards T bill probably will be brought back to MCLR even without considering them. Also we are confident that we’ll be achieving the 3% NIM because of the, you know, the stability of whatever currently achieved.
JAY MUNDRA
And MCLR will not reprice downward, right? Because it will
Shri Challa Sreenivasulu Setty
Not be repriced because we are not adjusting the interest rates on the deposits either repriced lower or repriced higher is unlikely.
JAY MUNDRA
So sir, assuming there is no change in the cost out in the card rate of the deposits, the cost of deposits should still decline right? In at least in the near term. So
Shri Challa Sreenivasulu Setty
There are two reasons why they will decline. One is I think we are focusing more on the casa. CASA component will contribute to the reduction. If you see even in Q4 also we have contain the cost of resources. And the other thing is that we would like to we’ve cut down significantly on our wholesale deposits which are expensive. We will further be cutting down on the wholesale deposits which gives us some relief on the cost of resources.
JAY MUNDRA
Right. And secondly sir, on LCR, if you can highlight what was the LCR during the quarter Q4 and you know, after these guidelines which have come in from April 1st, how does that changes? What
Shri Challa Sreenivasulu Setty
Is the LCR number you have,
Unidentified Participant
Sir, for the quarter it was 124 something 124 approximately. That
JAY MUNDRA
Was average for the. That
Unidentified Participant
Was the average for the quarter.
JAY MUNDRA
Because last quarter it was I think 130. Yeah.
Unidentified Participant
That
Shri Challa Sreenivasulu Setty
The liquidity is being consumed. Right. You are growing at 17%. But the. The current guidelines will give us around 3 to 4% improvement in the LCR.
JAY MUNDRA
And what would. I mean this. Let’s say 120. 124 becomes 127, 128. What would be your. Let’s say floor and maybe the upper limit for LCR to operate in.
Shri Challa Sreenivasulu Setty
See, for a bank of our size, we would like to have at least 10 to 15% over the regulatory minimum. Regulatory minimum is 100%. So. So 115% I think is a good ratio to have today. We have as we entered the year around 125%. And in this quarter again it will move up further. So. But we would definitely need, if the credit growth continues, some moderation will happen in the LCR. We would be comfortable around 115 to 120%.
JAY MUNDRA
Sure. And lastly, sir, if you have the number for AFS reserves, I mean what was the movement in this quarter, what was in Q3, December end and what is it at the margin? You
Shri Challa Sreenivasulu Setty
Have the number. We will give you that number separately. Thank
JAY MUNDRA
You, sir. Thank you, sir.
Pritesh Bumb
Hi sir, from DAM Capital. Just a few questions. Yes. So one is on the loan processing fees. It has been quite strong this quarter, almost doubled, I think. What has been the reason for that? Because loan growth has been strong throughout the year. But suddenly this quarter we saw that.
Shri Challa Sreenivasulu Setty
What’s your name? You said Pritesh
Pritesh Bumb
From DAM Capital.
Shri Challa Sreenivasulu Setty
Thank you very much for asking this question. I was just waiting for someone to ask this. Everybody is worried about nii. See, I think. I mean rightfully, I’m not undermining that. The overall construct which we mentioned right in the beginning, I don’t know, it sounded more English to you, but we really mean every word what we mentioned there. We are focusing on the relationship value. For instance, this processing fee is not only coming from retail operations. Retail operations, of course have given a significant uptick in the processing fee.
We have seen both in the large corporate, small corporate MSMEs everywhere. We have readjusted our processing fee. It is not only readjusting the processing fee not by way of increasing but reducing the concessions. We have promised them the good quality Service and we started charging for that processing the process efficiency and today we have almost in the retail operations we have had a growth of 50% in processing fee and the corporate book almost 30, 35%. So I think we are encouraging our field staff to be more proactive in terms of negotiating on that.
Pritesh Bumb
Sure. Second question was on basically the G SEC yields have moved up but our investment yields are slightly lower. One would have expected that the yields for us also will have randomly moved up in the quarter is that that we have moved some of the securities and booked some gains and that’s why the losses are slightly lower or any other stuff. Yeah, some trading
Shri Challa Sreenivasulu Setty
Has been done. Some if you see our trading profits have been good this, this quarter also. So that means you know that some of the switches we have participated in that which also add, you know portfolio yield moderation has happened there.
Pritesh Bumb
So basically the profitable securities have been sold. And that’s why I mean it
Shri Challa Sreenivasulu Setty
Depends on what securities are asked by the rbi. Right? Shamsher, anything you want to add.
Unidentified Participant
Is 5% allowed. So if you want we can give the figures we made in the entire year around 6321.
Pritesh Bumb
Sure, sure. So last question was on this. Basically there were news articles that lot of RBI has asked oil companies to move their dollar buying and selling through our. Our bank and also you know related FX related, you know transactions to our bank. What is, how is that going to benefit us? Any, any, any outlook on that?
Shri Challa Sreenivasulu Setty
I’m not aware of this.
Pritesh Bumb
Oh, okay. Thanks.
Unidentified Participant
Yeah.
Sushil Choksey
Excellent. Excellent annual numbers and record numbers and excellent. Very high payment of income tax over 25,000 crores. You are doing
Unidentified Participant
Great service is a backhand
Shri Challa Sreenivasulu Setty
Compliment is it?
Sushil Choksey
That over 25,000 crores in this type of environment is really wonderful. And couple of important points. Now everybody is looking at value unlocking and we have over 10% in National Stock Exchange. Sebi chairman has said it should get listed soon. So how. What’s the thought process on value unlocking? I see page number 5055 which talks about total reserve and surplus 5 lakh, some 95,000 crores. Now we’ll get a valuation, fair market valuation on the balance sheet. Apparently this number will also go up.
But in terms of business generation IRR would like to know what is our thought process if we can use some of the capital or value generated in core banking business in short term or long term ideally. So that would be very nice if you can share in detail. Second point is on market share of SBI today we are talking about 2222 and a half percent. There has been some thought process and talks going on if one can increase market share gradually. So what is the thought process of the bank’s board of increasing market share whether through rural banking or through district banking or branches and aligning.
Aligning with the government’s objective. If in how many years we can come to 25% market share. And what is our core strategy on that also including globalization. I think it could be a great opportunity. That’s it. I found the results better than expected because I’ve been present and looking at the transcript saw it as a knee jerk reaction. But with your clarification and lot of value unlocking, hopefully your direction towards that should help in creating greater value year to year. All the best to the board and our team.
Shri Challa Sreenivasulu Setty
Thank you. Thank you for the compliments. Yeah, yeah, of course I know you. But I wish I won 10 of NSE. Unfortunately we don’t within the group we have around 7.3% holding. But bank itself would be keen on participating in the yfs. We have given our in principle consent to them. What kind of participation will happen? The board will determine. But as you mentioned, I think the moment NSE gets listed the whole shareholding by SBI will be available as reserved to us to mark to market. Currently it is not mark to market in our books.
Yes, I think several times yourself have mentioned the hidden reserves what SBI has in terms of strategic investments. And this year I think if NSE gets listed that unlocking will happen. We are also seriously. As you are aware, we have embarked on listing SBI AMC and hopefully in this financial year we’ll be able to complete which will result in capital augmentation CET1 and this capital we would like. That’s what I think. It gives us confidence that going forward two things which are required for supporting the credit growth in terms of capital is fully.
We are convinced that we have the capability even with the current position, we can fund almost 12 trillion credit growth and the further recommendation will help us going forward and enough liquidity in the system. And a large bank which has got 59 lakh crores which will be probably in this month will be crossing 60 lakh crore deposits growing at 11 to 12%. As I mentioned in my inaugural speech, it’s a bank which is adding 11 lakh crore business every year which is equivalent to several other banks.
But we want to do it efficiently. The scale is kind of given, right? When you have 109 lakh crore business, the normal growth rate itself will add to your scale. So we want to use this capital efficiently, efficiently where it is required and efficiently in terms of giving the return to the investors shareholders to the. So we are sticking to our guidance through the cycles. We would like to ensure 15% return on equity to our investors minimum. So your second question I think is very very important question that when you have such scale and such dominant market share, how do you grow further?
And this is something what we deliberate very seriously in the board and we have now embarked. I think I must have mentioned last quarter also that we want to increase the market share in every district. Today. Fortunately the data is available. Market share data is available at the district level. So it is our strategy is that even if in a district you have a dominant market share of 60%, there are districts where SBI has a market share of 60%. But our guidance is that 1% increase in market share, whichever is that if either you have 10% market share or 60% market share every district we would like to grow 1%.
I’m very glad. Whenever I travel in the field, the lowest officer in the bank also is aware of market share. Sir, we are trying to improve the market share in our district. I think this is a great strategic shift which is happening and 25% is a little farther. But we would like to move 1% every year. That means, you know, four to five years. As I mentioned several times, we would like to be 25% in in terms of the GDP of the country.
Sushil Choksey
Thanks for elaborate answer. If you can permit me, particularly on segments I found gold loans. It was a focus area. Now we have besides 100% growth we have a good critical mass of over 1 lakh crores. As a thing express credit also now initiative since a few years. We have a good base now auto sector we found a little growth, a little muted at 8 and a half percent. But hopefully with this peacemaking efforts, mediation prices coming down, oil prices. Hopefully you can tell us the growth can improve.
So can we look at also gold loans whether we can. Why don’t we use opportunity to increase our NIMS through that? Because other gold loan players NBFCs are really having usurious rates. And we seem to be doing a service. But with the entry made. If you can increase market share and increase nims and also your thoughts on this increasing the rate growth rate growth in advances further through this verticals which we mentioned and your priority areas. That will be nice.
Shri Challa Sreenivasulu Setty
You want to respond before I discuss
Rama Mohan Rao Amara
So afs somebody has asked so this 31st March number is 5136 crores afs reserve.
Shri Challa Sreenivasulu Setty
They want to see the movement
Rama Mohan Rao Amara
Moment in December. Quarters are 8,005, 151. So roughly 3,000 crore decline. If it’s
Shri Challa Sreenivasulu Setty
Consumed, reserve has gone down.
Rama Mohan Rao Amara
Yeah,
Shri Challa Sreenivasulu Setty
But it did not have much impact on the CET1 ratio. Your question in terms of the gold loans. So the gold loan market is highly diversified. The ticket size, what we look for example, average ticket size of gold loan in our books is about 2.5 lakhs. These are price sensitive segment. They’re not 20,000, 30,000 loan amount. People who are willing to pay anything, any rate of interest. These are price sensitive and gold loan also. You must realize there is a very efficient equity product. Return on equity product, ROE product.
Because there is zero risk weight on that. So we would like to have a very risk strong growth. But with very qualitative growth. For instance, our Overall LTV is 52%. That means, you know, you have very safe lending there. And deal is also not bad. I think 8.5 to 8.75 is something what we get on this 9%. 9% is a good yield for a product which doesn’t require any capital allocation at all. And with almost zero npa.
Piran Engineer
Thank
Shri Challa Sreenivasulu Setty
You.
Sushil Choksey
Thanks.
Piran Engineer
Hi sir, this is Piran, engineer from clsa. Just firstly, sorry to harp on the NIM question again. But we exited with NIMs of 2.9%. Our roadmap to 3% NIM would be driven by deposits. No, no, we exited
Shri Challa Sreenivasulu Setty
3% domestic NIM and our guidance always has been on the domestic NIM.
Piran Engineer
But so okay, three was the full year NIM, right? Yes,
Shri Challa Sreenivasulu Setty
Full year NIM.
Piran Engineer
The last quarter’s NIM was 2.93.
Shri Challa Sreenivasulu Setty
No, even lower in
Piran Engineer
Your PPT. 2.9. Yeah, 2.93.
Shri Challa Sreenivasulu Setty
Domestic NIM is 2.93.
Piran Engineer
Yeah. So for that to improve, is it going to be a yield driven thing or a cost of deposits driven thing.
Shri Challa Sreenivasulu Setty
So as I mentioned, you know you have 60% of fixed deposits and fixed deposit growth is significant for us. 14%, 15% on the retail term deposit. We would like to have both levers used. One is reduce further cost of resources. It may not be very significant, but reduction of cost of resources will happen two ways. One is whether we can further augment our CASA in terms of absolute amount. And number two, reduce the wholesale deposits which are expensive. But that movement will be very limited. I don’t think there will be any significant pickup on that.
You’re right, I think it will. More in terms of the yield and advances management, we would Be looking at asset mix and also increasing spreads wherever it is feasible. Both on the corporate side as well as retail sides.
Piran Engineer
Okay, thank you sir. Just secondly, what percentage of our MCLR book is yet to reprice?
Shri Challa Sreenivasulu Setty
MCLR book? I think the five basis point which is done in December is reduced, right. That will take about three to four months but that is not much great impact.
Piran Engineer
But the ones done in October, a lot of them would still. Yeah you see be Left, right. Because six months MCLR
Shri Challa Sreenivasulu Setty
Is predominant. So we have about 40% which is one year MCLR. Some part of that probably is left out. Otherwise mostly is priced.
Piran Engineer
Understood. And sir, lastly, just on current account deposit growth we were doing pretty well growing 20 25% until 2 3/4 back. Now it’s come down to single digits. Anything to read into it or is it just a period end number
Shri Challa Sreenivasulu Setty
Period end number of the previous year which has impacted. See we had a period end movement in FY25 March 25th we had a significant current account movement because of the government funds release. Those things were not there and it is a very large amount, almost 50,000 crores which has come in the last few days of March 25th. Despite that funds not being available. I think we have done phenomenally well in the current account. And as I mentioned somewhere earlier, we have had 21% decline in the government current account deposits in the last year.
Whereas we completely pivoted towards non governmental current account where we had 23% growth rate in the current account. That is the number which you see the year end number for March 26th in my view is the best number ever could achieve by SBI because we had a double impact of the last minute flows which were not available this year. And the overall current account deposits from the government has fallen about 21%. Despite that because of our strategies and current accounts business account being opened, 23% growth rate was there in the non governmental account.
Unidentified Participant
I
Shri Challa Sreenivasulu Setty
Think this is a very good current account story for us.
Rama Mohan Rao Amara
Just to add. So one is the current new customer acquisition and more balances in current account. Apart from this retail current account customer or business current account customer, they are also giving us opportunity to cross sell other transition banking products to them. They may be our prospective SME borrower also. So this is the value which is essentially hidden. You can say we have to yet to unlock or in the process of unlocking. So this is giving us deposit on the one side focusing on retailer business customer for current account and also creating opportunity for other fee income plus maybe lending also in future.
Piran Engineer
Understood thank you. And so just lastly one suggestion. Your slide 15 is pretty useful. Can you also include quarterly data points? Maybe put a slide 16 with the same information but quarterly. It’ll be really useful for all analysts. We will, we will see.
Shri Challa Sreenivasulu Setty
See we didn’t want to change the slides
Piran Engineer
Video. Yeah. So now that we are entering Q1 onwards we will try to improve. Yes,
Shri Challa Sreenivasulu Setty
Thank
Piran Engineer
You.
Anand Dama
So here Anand from MK sir, other OPEC seems to be on a higher side on a quarter on quarter basis There’s a lot of bunching up of other OPEX which happens in the fourth quarter. This happened last year as well. Is there a way apart from any business acquisition cost to spread out the OPEX one And how do you see the cost income ratio shaping up in FY27? Any efforts that you’re taking to improve that? Because that’s certainly on a higher side given that we have a sizable corporate book but still our cost income ratio at about more than 50% is slightly on a higher side.
What are the efforts that we’re going to take on that front?
Shri Challa Sreenivasulu Setty
See our effort is to keep cost to income ratio contained below 50. I think this is a guidance which we have given and we would have had probably ended the year with 48, 47% but for the treasury income not supportive otherwise the costs have been contained both in terms of bunching happens because of the payment cycle which comes through it is not intentional but I think by design much of the overheads are booked during the last quarter so most of the expenses and income from for Q4 has to be compared with Q4 only.
Any other comparison will not work. So I don’t think at this moment we are not thinking about but we will definitely have a look whether any of the expenses can be spread over the four quarters so that we will not have that bunching issue.
Anand Dama
Sure. On the Forex open positions which were basically asked to unwind so that impact we have largely taken in the fourth quarter itself for that will happen in first I
Shri Challa Sreenivasulu Setty
Did mention I think we said that the Q4 MTM impact what you see is about 100 crores and complete unwinding had happened on the 10th of April which resulted in a net loss of 57 crores.
Anand Dama
Okay, that’s very small and you’ve guided for a credit growth of about 13 to 15% for FY27. Yes. Right. That’s on a lower side versus what we had in this year.
Shri Challa Sreenivasulu Setty
So
Anand Dama
13 to 15% chances probability of that we hitting the higher end of the the guidance still is higher going to be strong. I think as it stands
Shri Challa Sreenivasulu Setty
It looks good. Except that you know how this West Asia conflict, how much it lingers and apart if we, if we do not factor in that at this moment I think 13 to 15% seems to be a feasible option. See at the same time as I keep mentioning, the credit growth is a function of macros. We don’t want to grow significantly higher than what macros can support. So if we have 6.5, 6.9% GDP growth with 4% inflation and nominal GDP of around 10.5 to 11% we built around 3% over that 3 to 4% max. If any of these numbers don’t realize then we don’t want to grow as much.
Anand Dama
And so what’s a broader outlook on the MSME space? Because that’s the one which has been impacted the most because of the West Asia conflict. Any stress pool that we have identified do I know that basically we’re going to do a lot of ECLGs but that again will be construed as that we are supporting that customer. So any stress pool that we have identified, any incremental provisions they’re going to make. And that’s why you’re guiding for a 50 basis point credit cost in FY27. No,
Shri Challa Sreenivasulu Setty
No. 50 basis point credit cost is something what we’ve been guiding for the last three years. We continue to do that. It’s nothing to do with the Bastiation conflict. But even if any some movement is there, we still are sticking to that guidance. Broad based stress is not visible yet. There are clusters which are impacted definitely. For example Morbi cluster which is being talked about because gas is not being affordable by them. So they are not producing small and medium enterprises. They are affected.
We, we are working with them what kind of support they need. In fact last last month we have asked them to take annual maintenance. That period is also over. Now they have to come back to production but they have not come yet. But that is overall credit exposure to the whole cluster is very minimal. But they definitely need some support going forward. We’ll have to see what support we can give other than that hydrocarbons. Obviously the oil companies are impacted but there are very strong balance sheets.
I think there are no credit related issues with them. They may have their own P and L issues but it will not translate to credit issue. I’d like to just add a couple of points just around
Ashwini Kumar Tewari
The way we have been mitigating the risk in the MSME portfolio. We have launched bre. I think we announced in several Quarters back as well. This is giving good results. In fact when we look at the delinquencies in a BRE versus non BRE portfolio BRE portfolio the delinquencies are lower. That means underwriting models are much more robust. Second data point is like in terms of CGTMSE eligible loans which can be covered under CGT msc. In the absence of that we used to take partly it is to be collateralized.
We have shifted from predominantly CGT MSC. So coverage is almost 58% of the universe which is eligible for CGT MSC. So the obviously our mitigation is much higher and recourse to the CGT MSC is much higher. I think these are helping us to get a better handle on the quality of the portfolio.
Unidentified Participant
Hi sir, so Param here from Investec. So question on your term deposit repricing. Term deposit repricing lower. Is it largely done or is there any
Shri Challa Sreenivasulu Setty
Some residual tail end? That’s all but mostly done.
Unidentified Participant
Okay sir, secondly on your salary costs in this quarter it is generally Q3 to Q4 we see an uptick. There is the PLI related payout but this time it’s not there. Is there some. Yeah, there is
Shri Challa Sreenivasulu Setty
A. I think classification change because the PLI which is to be given on the basis of the government PLI it is still being debated. So we have not booked in the staff expenses what you see in your presentation it is in other provisions.
Unidentified Participant
So if
Shri Challa Sreenivasulu Setty
You add I think it’s broadly in the similar way
Unidentified Participant
So it’s accounted for accountants and sir, lastly your. You will be saving on DICDC premium next year, right? So
Shri Challa Sreenivasulu Setty
Don’t ask me the number I will lose my job.
Unidentified Participant
What you paid this year that’s. We can calculate the rest. Sorry,
Shri Challa Sreenivasulu Setty
No. We. As per the regulation we are not able to. We are not supposed to disclose that we will get benefited definitely but this is not a disclosable item.
Unidentified Participant
Okay, fair enough. Thank you so much.
Unidentified Participant
Congratulations to team SBI for multiple milestones.
Shri Challa Sreenivasulu Setty
Thank you.
Unidentified Participant
Global transformation is a necessity for India led by war. Maybe business mixes are changing. I personally sense there is going to be a big capex boom in India led by energy so we need renewable, we need nuclear data center needs lot of energy. The Middle east attacks on Amazon may divert a lot of data centers to India. The transmission line expansion needs big growth Any kind of indication or lead time which you are already sensing because these ticket sizes will not touch base with a bank which is not of a size and they will have to participate along with SBI to disburse the money and SBI capsule have a big role because I see a lot of reports generated by them too.
Be it hydrogen renewable in multiple sectors.
Shri Challa Sreenivasulu Setty
So I’ll answer that and I’ll also ask Ashwini to respond on that. Transmission, Yes, I think is going to be one of the most important infrastructure which is going to be developed. Some of the projects are fairly large as you mentioned. We have been having discussion with them. What kind of structures they will come out is not very clear yet whether there will be an SPV or it will be done by their own companies. But there is a good opportunity coming up there. Apart from transmission, we also see a lot of emerging sector.
I think last time also I mentioned we have started an initiative called Chakra. This is to support all sunrise sectors. Whether it is green hydrogen or whether it is data centers, whether it is new renewable energy models which are emerging. So the are even small modular reactors which government has been talking about semiconductors. These are all the activities and sectors probably which have greater potential for investment. But they need a separate kind of structure. It is not a pure vanilla loan which they require.
They may require a mezzanine funding, they may require equity funding. So we want to handle that kind of composite structures through our chakra. As far as transmission, Ashwini, you want to add something?
Unidentified Participant
So two, three things for transmission, of course what Sarah said, transmission, lot of potential. But I would also point out to battery energy storage systems. We got a large number of proposals which we are processing. We also have the data center is another activity where we have got a large number of cases. We are looking at some we have already done and then there are others like pump storage, hydro, which is something which is starting to come to us. These are only one or two are live currently.
But now a large number of people are coming because the latest tenders are all for round the clock power. It’s not plain vanilla, solar or hydro etc. So with that combination, either Bess or Pump Store is hydro combination along with solar, wind is the new flavor. So we are seeing a lot of activity. And transmission clearly is one thing which is the need of the hour. Because without adequate transmission the curtailment in solar is quite high. So I think we are supporting all of that as it goes forward.
And lastly smart metering. We’ve done quite a bit already, but still there are a lot of enough opportunities there.
Unidentified Participant
When you highlighted a data center, are we funding GPUs or we’ll only do infrastructure?
Unidentified Participant
Both. Yeah, both, both. So we look at the. It comes
Unidentified Participant
As A package
Unidentified Participant
Package. We look at the clients which are there because the way it is being presented here is more like a developer story because the developer creates a shell and ultimately the fit out is done by the ultimate user. And we are focusing largely on the hyperscaler model because that’s where the demand is assured and there is no the client, the quality is assured. So. So we’ve got quite a few of them. And Mumbai especially has a lot of data centers coming up. We see a lot of potential in this area.
Unidentified Participant
This means that Hyperscaler means your LRD business ticket size maybe 15, 20 years kind of tickets and competitive. How is that visibility, sir?
Shri Challa Sreenivasulu Setty
So as far as infra the greenfield project is concerned our ability to price is better.
Unidentified Participant
So my last question, SBI has you know to multiple retail salary accounts with touch points to customer concern on wallet share. How many products are we currently doing and what will we target?
Shri Challa Sreenivasulu Setty
You have any PPC number but the last number I know is about 4.5, 2.5 to 3. Around 3 product per consumer. Yeah, financial products. So I think 3 is. 3 is okay. But our idea is to go take it to five and there are customers who tell me that they take about eight to 10 products. Different products from SBI. So that means that there’s a potential to go to 8 to 10. But we would be okay if we reach a PPC of 5.
Rama Mohan Rao Amara
And the auto
Shri Challa Sreenivasulu Setty
Loans. What you have asked essentially is a hook product. You can’t make money on the auto loan itself, the dealer commissions and other things. But it brings many other product engagements.
Unidentified Participant
But to reach 5 I suppose we need a lot of transportation transformation where human resources concerned. Specifically on retail.
Shri Challa Sreenivasulu Setty
True
Unidentified Participant
Branches are concerned connectivity. So everything can’t be digital.
Shri Challa Sreenivasulu Setty
Yeah. So
Unidentified Participant
How are we building up that capability? So
Shri Challa Sreenivasulu Setty
This is something what we mentioned that how do we use our manpower at the branches when large number of transactions have moved to alternate channels. We are redeploying some of the workforce into sales and train our workforce in the branches for upselling. So this is something what is happening overall and that is how you see that for a large bank the diversified customer base we have an average of three is a good number.
Unidentified Participant
So this mutual fund and insurance business are we tracking at each district level?
Rama Mohan Rao Amara
Yeah. And branch level Also
Unidentified Participant
Branch level. You
Rama Mohan Rao Amara
Know also a deep integration with subsidiary production.
Unidentified Participant
We always face this charge of miss selling and although we are the lowest. So I think all of that is being attempted in the right suitable team.
Unidentified Participant
Good luck for the year and thank you for answering all. Thank you. Thank
Shri Challa Sreenivasulu Setty
You joke sir.
Unidentified Participant
So this is Mahesh from Kotak. So one question around the margins again, what is so different about this quarter in terms of the margins changing direction so sharply? Whereas if you look at the last two rate cuts which happened in March and June, the impact on the P L was not that high. Whereas this time around you seem to be attributing the entire decline to that one particular variable.
Shri Challa Sreenivasulu Setty
No, I’m not attributing only for that. I said that the way the composition moved it is not only when you look at the
Unidentified Participant
The
Shri Challa Sreenivasulu Setty
Overall EBLR and T Bill link pricing has to be looked at. This is what I said. The corporate book has moved to a floating rate. Whatever growth has happened in the last quarter is also predominantly came from the T bill which gives us confidence that we can do the asset mix change going forward. And we’re trying to move every T bill linked loan to an MCLR based loan.
Unidentified Participant
So just to clarify that one point, the T bill increased last quarter right in terms of the price at which it was versus where it is today. That would have had a positive impact.
Shri Challa Sreenivasulu Setty
No, no no. T Bill portfolio has increased
Unidentified Participant
But that portfolio would have had a natural upward repricing right during the quarter or in the last. You have to
Shri Challa Sreenivasulu Setty
Compare with MCLR versus T Bill, not the T Bill versus T Bill. The one which is MCLR linked earlier has moved to T Bill and bring down the yield
Unidentified Participant
T bill there is a uptick, there’s
Shri Challa Sreenivasulu Setty
A overall T Bill portfolio has had a good yield pickup. But if something is moving from MCLR to T Bill then there’s a dip in the earnings. But
Unidentified Participant
This was a choice you took in advance. It is not only choice, I
Shri Challa Sreenivasulu Setty
Think the choice see it is also the composition of the users of the facilities. See if you have seen since you have asked that question a little deep dive probably is required. Lot of large well rated corporates were accessing the market as moved to banks and most of their facilities were linked to T bill. They were not utilizing at all. They were not using at all. They were using access to the market CP and all that has moved to the bank. And this is the relationship value we have. While you all are looking at the NII part we are looking at the overall value of the relationship with the corporate which is not evident in the nim.
Ashok Ajmera
True,
Shri Challa Sreenivasulu Setty
It is evident in our roa. Where do I get the roa? Where do I get the fee based income? What you are seeing and the other income it is because of the relationship with the corporate when they come Back to us. I can’t say that, you know I’ll not give a committed T Bill rate even if it means that there will be some softening of deals on that. This is, this is what I, I was trying to explain. It’s not purely on the 25 by ABLR which anyway we have announced what we have not factored in for a significant moment from the market to a bank.
Unidentified Participant
So if I were to just simply draw the difference in the corporate sector and assume a large part of it was T Bill, I should be able to understand which portfolio took the T Bill portfolio
Shri Challa Sreenivasulu Setty
Meaning
Unidentified Participant
If I were to just kind of. We’re just trying to understand as to how long this impact will be in the. No, no. These are all short
Shri Challa Sreenivasulu Setty
Term impacts. Only predominant book has been in the short term. There could be some medium term loans also which are T Bill price. But in the current financial area itself we would be able to move as large chunk into MCLR based. There are two ways of handling this on the corporate side particularly where we have very strong relationship. It is not only purely small working capital being drawn by them. Either you increase the spread over T Bill and say that this is what the spread I’m looking for.
If they are getting a better price, they move on or move them to mclr. So these are the two strategies which we will be following this year.
Unidentified Participant
Perfect. And one last question. When we do the calculated yield on advances, the decline has been fairly sharp. Now one of the reasons could be that the book was grown towards the end of the quarter. Yes, if I were to just move into 1Q and 2Q. I know that you don’t want to give a quarterly guidance. We’re just trying to understand does it dip first and then starts moving higher or do you have visibility of how this traction? Mahesh,
Shri Challa Sreenivasulu Setty
I don’t want to hazard. I guess I’m still sticking to my 3% annual name. But if you really ask me, I don’t think there will be any further dip.
Unidentified Participant
Okay,
Shri Challa Sreenivasulu Setty
If it satisfies you.
Unidentified Participant
We wanted that answer sir. Thank you.
Nitin Aggarwal
Hi sir,
Shri Challa Sreenivasulu Setty
I think we have to go on. Hi sir,
Nitin Aggarwal
This is Nitin Agrawal from Motilal. One question again around the corporate loan growth. If I Look like last two quarters we have reported almost 15% growth in the corporate loan book. While you talked about that, you are looking at things in totality in respect to ROA and roe. But does this growth momentum, do you think this will continue in the next coming quarters because it will continue to have a bearing on the margins Also wherein we are expecting things to move up from here.
Shri Challa Sreenivasulu Setty
So the part movement also as I mentioned from market to bank. If the market improves probably the reversal will happen. So that’s the reason our corporate guidance is 12 to 13% is what we are looking at. And our 13 to 15% will be primarily driven by the RAM. RAM growth.
Pawan Kumar Kedia
Yeah. Due to paucity of time we’ll not take up a few question if
Shri Challa Sreenivasulu Setty
You want to ask something.
Nitin Aggarwal
Just one clarification on the ROA wherein I’ll be talked about 1% plus ROE that we look to maintain.
Shri Challa Sreenivasulu Setty
Yes.
Nitin Aggarwal
As we now start providing for ECL. You talked about a 34 year transition journey. Will that guidance stay unchanged over those 34 years or you see some impact? We still
Shri Challa Sreenivasulu Setty
Saying that 1% through the cycles.
Nitin Aggarwal
Okay. Sure sir. Thank you so much.
Pawan Kumar Kedia
Sir. We have a few questions coming in through the online webcast now. This will be addressed by the Chairman. Sir. Now
Shri Challa Sreenivasulu Setty
I think there’s one question. Why Q3 profit is more than Q4. I think it is other way around why the Q4 is having less profit than Q3. Mainly because of the MTM loss of 4522 crores in Q4 as against loss of 143 crores only in Q3. This is question from Rao and question from Tamarish Sinha from off business. What is the guidance on net interest margin and I for FY27NI guidance we don’t give but NIM as I said our guidance for domestic name is to remain above 3%. And because Bertia, why was Q4 Nim so much lower?
I think we have had enough discussion on this. If any further clarifications are required we can have separately Sunil Melwani. What are the steps bank is planning to take increase market share in casa. This is what I mentioned in terms of focusing on the district level improvement on the market share as well as a very strong campaign which we launched. I’ve seen good impact of that campaign is ABCD all branches to contribute to deposits. I think this is also helping us in terms of mobilizing. And as I mentioned Savings bank.
We’ve witnessed a good growth of almost double digit 10% growth on a very large base of Savings bank from Sonora Asset Management. What was MTM loss provided for treasury losses was the Same passed by NI. There’s an MTM loss of 4522 crores in Q4 as against 143 crores in Q3. The MTM is rooted through other income non interest income. Rohan Mandora from Equiras. Your cumulative domestic yielding advances for 12 months is down 11 basis point. So what is the domestic yield for Q4 and what explains the sharp decline?
I think again this also we have explained at length what led to this yield and decline in yield. But essentially as I mentioned reported cut of 25 base point and also shift in corporate bank corporate credit composition. Siddharth Rajpurohit Our EBLR share is only 35% so there should have been only some seven base point. I think we need to add both the EBLR book as well as the T bill linked advances. So that is about 50. Currently we have eBill and T bill about 49%. Whether the bank has made any amount of provision based on ecl?
No, not yet Siddharth again share of AAA in corporate mix has risen by 400 basis point. Does it have an impact on yield guidance on the share of AAA going forward? As I mentioned, some of the best well rated companies are moved from the market to bank. While it had dramatically altered the composition of AA and AAA it had impact on the yields as I mentioned earlier. Jeet from Ambit, please clarify. Off balance sheet exposure like financial guarantee not required provisioning. Can we now assume that non funded credit exposure disclosed in Basel 3 will require provision?
Initial norms provisioning and non fund credit expert shall be computed as per RBA guidelines effective from 1427? I think they also attract provision. So I think broadly we have answered the questions. We can go ahead now.
Pawan Kumar Kedia
I trust all the questions have been addressed. We will be happy to respond to other questions in offline mode. Let me end the evening with the thanking chairman SIR, MD, SIRS, DMD SIR, top management team, senior officials of the Circle and various offices connected through webcast, analysts, investors, ladies and gentlemen, we thank you all for taking time out of your schedule and joining us for this event. To round off this evening, we request you all present here to join us for high tea which is arranged just outside this hall.
Thank you. Thank you so much.