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MUMBAI: State Bank of India reported a 35% drop in net profit for the quarter ended December 2023 following a one-time exceptional provision of Rs 7,100 crore, comprising Rs 5,700 crore for pensions and the rest for salaries.
The country’s largest bank reported a net profit of Rs 9,164 crore for the quarter ended December 2023 compared to Rs 14,205 crore in the corresponding quarter last year.The higher pension provisions follow a court decision requiring SBI to correct an anomaly where a section of the staff received a pension at the rate of 40% of salary, while the rest received 50%.
Responding to a question on whether the bank would pick up Paytm Payments Bank customers, the bank’s chairman, Dinesh Khara, said the bank would be keen on taking over Paytm’s merchants and merchant Bank accounts. “We have a subsidiary, SBI Payments, which does the merchant acquiring while the bank can provide the bank accounts for the merchants,” said Khara. He added that the bank was open to acquiring these accounts individually or through a one-time migration.
The drop in net profit was despite SBI’s net interest income, which rose 4.6% to Rs 39,816 crore. However, net interest margins experienced a decline of 35 basis points over the year and nine bps quarter-on-quarter to 3.34% due to deposit repricing (1%=100 bps).
Announcing the results, Khara said the rate increase has been fully passed on to all deposit holders. He said he expected the interest rate cycle to turn and interest rates to start declining by the third quarter of FY25. While the bank has decided to make full provisions for liabilities to its staff, Khara indicated that prospects for the third quarter were better as the bank would not have to make employee-related provisions of Rs 9,000 crore that it made during the third quarter.
The country’s largest bank reported a net profit of Rs 9,164 crore for the quarter ended December 2023 compared to Rs 14,205 crore in the corresponding quarter last year.The higher pension provisions follow a court decision requiring SBI to correct an anomaly where a section of the staff received a pension at the rate of 40% of salary, while the rest received 50%.
Responding to a question on whether the bank would pick up Paytm Payments Bank customers, the bank’s chairman, Dinesh Khara, said the bank would be keen on taking over Paytm’s merchants and merchant Bank accounts. “We have a subsidiary, SBI Payments, which does the merchant acquiring while the bank can provide the bank accounts for the merchants,” said Khara. He added that the bank was open to acquiring these accounts individually or through a one-time migration.
The drop in net profit was despite SBI’s net interest income, which rose 4.6% to Rs 39,816 crore. However, net interest margins experienced a decline of 35 basis points over the year and nine bps quarter-on-quarter to 3.34% due to deposit repricing (1%=100 bps).
Announcing the results, Khara said the rate increase has been fully passed on to all deposit holders. He said he expected the interest rate cycle to turn and interest rates to start declining by the third quarter of FY25. While the bank has decided to make full provisions for liabilities to its staff, Khara indicated that prospects for the third quarter were better as the bank would not have to make employee-related provisions of Rs 9,000 crore that it made during the third quarter.
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