State Bank of India · NSE:SBIN
State Bank of India — FY2008 Earnings Presentation
29 slides from State Bank of India's earnings presentation, May 2, 2008
Slide 1: Annual Results FY 08
Annual Results FY 08 May 02, 2008
Slide 2: Business Highlights
BUSINESS HIGHLIGHTS • SBI Group net profit crosses USD 2.24 Billion (Rs 8,960 crore) • SBI Stand-alone Net Profit crosses Rs 6,700 crore – Net Profit for FY 08 at Rs 6,729 crore, up by 48.2% from Rs 4,541 crore in FY 07 – Net Profit for Q4 FY 08 at Rs 1,883 crore, up by 26.1% from Rs 1,493 crore in
Slide 3: High advances growth coupled with 123 bps improvement in yield
HIGH ADVANCES GROWTH COUPLED WITH 123 BPS IMPROVEMENT IN YIELD Rs crore Quarter 4, FY 08 FY 08 vs FY 07 +23.4% +7% 422,181 422,181 395,343 342,232 FY 07 FY 08 Dec 07 Mar 08 Market Growth Rate 21.6% FY 07 to FY 08, • Yield on advances has increased from 8.67% to 9.90% • Interest income from advances
Slide 4: Segmental break-up of advances growth (1/3)
SEGMENTAL BREAK-UP OF ADVANCES GROWTH (1/3) Rs crore FY 08 vs FY 07 Large • Focus on high fee income Corporate +23% across relationships 35,844 44,044 • Largest syndication of rupee denominated project FY 07 FY 08 finance lending Mid +24% • Mid corporate portfolio Corporate alone larger than most 87
Slide 5: Segmental break-up of advances growth (2/3)
SEGMENTAL BREAK-UP OF ADVANCES GROWTH (2/3) Rs crore FY 08 vs FY 07 • Highest provider of International +50% corporate syndicated credit 38,652 58,135 • Capturing India related business in high potential FY 07 FY 08 countries • Highest disbursement Home Loans +19% growth in the industry 37,982 45,09
Slide 6: Segmental break-up of advances growth (3/3)
SEGMENTAL BREAK-UP OF ADVANCES GROWTH (3/3) Rs crore FY 08 vs FY 07 • First bank to introduce Auto Loans online approval of Auto +30% loans 5,504 7,149 • One of the highest growth FY 07 FY 08 rates in the industry Personal • Focus on existing customers and mass- Loans +19% 31,890 affluent segment 26
Slide 7: Deposit growth has kept pace with advances, CASA ratio stable
DEPOSIT GROWTH HAS KEPT PACE WITH ADVANCES, AND CASA RATIO HAS REMAINED STABLE Rs crore +23% 537,406 435,521 FY 07 FY 08 FY 07 to FY 08, cost of CASA Ratio deposits has increased Percentage from 4.79% to 5.59% 100% CASA 44 43 TDR 56 57 FY 07 FY 08 6
Slide 8: Overall credit/deposit ratio and NIMs have remained stable
OVERALL CREDIT / DEPOSIT RATIO AND NIMS HAVE REMAINED STABLE Percentage Credit / Deposit Ratio* • Spreads have 74.53 72.44 increased from 388 bps in FY 07 to 431 bps in FY 08 • Investment yield has declined by 7 bps • NIM moved from 309 bps (excluding one- time items) in FY 07 to 307 bps in FY 08 FY
Slide 9: Market share has increased in deposits driven by CASA
MARKET SHARE HAS INCREASED IN DEPOSITS DRIVEN BY CASA, WHILE THAT OF ADVANCES IS MAINTAINED Percentage Overall Low cost* Advances Deposits 17.40 15.49 15.28 14.81 15.44 13.92 FY 07 FY 08 FY 07 FY 08 • Focus on high-yielding advances • Rebalancing of portfolio to shed high volume low yielding advance
Slide 10: Market shares increased in metro/urban and semi-urban/rural areas
MARKET SHARES HAVE INCREASED IN METRO/URBAN AND SEMI-URBAN/RURAL AREAS Percentage Advances Deposits Metro/ Urban 14.41 14.42 12.96 13.28 Mar 07 Dec 07 Mar 07 Dec 07 Semi- 25.50 26.40 23.40 24.00 urban Mar 07 Dec 07 Mar 07 Dec 07 Rural 16.50 17.60 16.90 18.10 Mar 07 Dec 07 Mar 07 Dec 07 9
Slide 11: Other income increased by 29% in FY 08
OTHER INCOME HAS INCREASED BY 29% IN FY 08; CORE FEE INCOME INCREASED BY 31% IN Q4 08 Rs crore Q4 08 vs. Q4 07 FY 08 vs. FY 07 Total Other +29% 8,695 income +6% 6,765 2,668 2,817 Q4 FY 07 Q4 FY 08 FY 07 FY 08 Fee +23% Income +31% 5,914 4,805 3,060 2,337 Q4 FY 07 Q4 FY 08 FY 07 FY 08 Growth of fee in
Slide 12: Mutual fund and insurance cross sell income increased by 79%
MUTUAL FUND AND INSURANCE CROSS SELL INCOME HAS INCREASED BY 79%; SBI IS NOW ONE OF THE LARGEST BANCASSURANCE PLAYERS Rs crore Mutual Funds Life Insurance Q4 08 VS Q4 07 FY 08 vs FY 07 +79% 154 67 86 +154% 61 32 24 33 87 5 54 19 28 Q4 FY 07 Q4 FY 08 FY 07 FY 08 For FY 08, Rs 1,450 crore of NBP for S
Slide 13: Cost/income ratio declined by 520 bps
THE COST/INCOME RATIO HAS DECLINED BY 520 BPS, LEADING TO AN OPERATING PROFIT INCREASE OF RS 3,107 CRORE Cost income Q4 08 VS Q4 07 FY 08 vs FY 07 ratio (Percentage) 240 bps 520 bps 54.2 45.0 49.0 42.6 Q4 FY 07 Q4 FY 08 FY 07 FY 08 Operating +31% profit 13,107 (Rs crore) 10,000 +10% 3,969 4,373 Q4 F
Slide 14: NPAs remain under control
NPAs REMAIN UNDER CONTROL Rs crore Gross NPA Net NPA Asset quality 3.04% 2.92% 12,837 9,998 1.78% 1.56% 7,424 5,258 FY 07 FY 08 13
Slide 15: Key strategic initiatives undertaken (1/3)
KEY STRATEGIC INITIATIVES UNDERTAKEN (1/3) • Centralized operating architecture for all metro and urban branches nearing BPR completion – Over 400 Centralized Processing Centers established – Over 2,000 branches redesigned during the year, and are now focusing on sales and service; Total branches re
Slide 16: Key strategic initiatives undertaken (2/3)
KEY STRATEGIC INITIATIVES UNDERTAKEN (2/3) • New Rural strategy being rolled out aggressively Rural – Largest owned agri/rural salesforce in the country with over 3,000 people and 3,000 more being recruited in addition to staff in branches – Created third party channel (BC/BF) – 2,769 already enroll
Slide 17: Key strategic initiatives undertaken (3/3)
KEY STRATEGIC INITIATIVES UNDERTAKEN (3/3) Inter- • Aggressively supporting Indian companies’ overseas expansion; Total international national advances grew by over 50% in FY 08 • New international strategy in place – Preparing to launch full-fledged banking services in Singapore; Only Indian bank t
Slide 18: Operating profits have increased by 31.1% Y-o-Y
OPERATING PROFITS HAVE INCREASED BY 31.1% Y-o-Y Rs crore Q4- Q4- Q-o-Q Y-o-Y 2007 2008 Growth FY07 FY08 Growth Comment Int.- advances 7,057 9,603 36.09% 24,839 35,228 41.82% • Advances growth of 23% coupled with increase in yields by 123 bps Other Interest 3,461 3,974 14.79% 12,403 13,722 10.63% • F
Slide 19: Net profit has increased by 48.2% Y-o-Y
NET PROFIT HAS INCREASED BY 48.2% Y-o-Y Rs crore Q4- Q4- Q4-0-Q4 Y-o-Y 2007 2008 Growth FY07 FY08 Growth Comment Operating Profit 3,969 4,373 10.18% 10,000 13107 31.07% Provisions 1,413 1,620 14.58% 2,410 2,668 10.71% • Loan loss provisions in line with increase in business • Includes Rs 168 crore M
Slide 20: SBI stand-alone balance sheet has grown by 27%
SBI STAND-ALONE BALANCE SHEET HAS GROWN BY 27% Rs crore Mar 31, Mar 31, Y-o-Y 2007 2008 Growth Cash and balances with RBI 29,076 51,534 77.2% Balances with banks and money at call and short notice 22,892 15,932 -30.4% Investments 149,149 189,501 27.1% Advances 337,337 416,768 23.5% Fixed assets 2,81
Slide 21: Key Ratios
KEY RATIOS FY2007 FY2008 Return on Assets 0.84% 1.01% Return on Equity 1 14.24% 17.82% Capital Adequacy Ratio 12.34% 13.47% NIM 3.09%2 3.07% Cost to Income 54.2% 49.0% Fee to Operating Income 22.0% 23.0% 1 Before taking into account Rights issue 2 excluding onetime items 20
Slide 22: Associate bank performance has also been robust
ASSOCIATE BANK PERFORMANCE HAS ALSO BEEN ROBUST Rs crore Net Profit Net Profit FY2008 FY2007 Y-o-Y Growth State Bank of Mysore 319 249 27.94% State Bank of Bikaner and Jaipur 315 306 3.01% State Bank of Hyderabad 557 506 10.19% State Bank of Indore 234 190 23.19% State Bank of Travancore 386 326 18.
Slide 23: SBI Life has outperformed the market
SBI LIFE HAS OUTPERFORMED THE MARKET Total Premium collected New Business Growth* Rs crore Percentage +92% 5,622 108 83 2,928 24 FY 07 FY 08 Industry Private SBI Life Players • Opened 52 new branches • AuM stands at Rs 10,500 crore at the end of FY 08 Other • Added around 1.9 Mn new lives during the
Slide 24: SBI Mutual Fund gains market position
SBI MUTUAL FUND GAINS MARKET POSITION Assets under Management Rs crore +58% 26,963 17,065 FY 07 FY 08 • Ranked 6th in terms of AuM • 5.17% Market share in terms of AuM Other • The company has won 8 awards, including 5 awards from CNBC TV-18 highlights CRISIL and 3 from Lipper India Fund. • The compa
Slide 25: Other subsidiaries are also performing well (1/2)
OTHER SUBSIDIARIES ARE ALSO PERFORMING WELL (1/2) • Net profit has grown by nearly 100% in FY 08 to Rs 142.2 crore, up from Rs 71.2 SBI CAPS crore in FY 07 • Fee Based income has increased by 41.2% and fund based income by 114.5%. • The group has successfully positioned itself as full service invest
Slide 26: Other subsidiaries are also performing well (2/2)
OTHER SUBSIDIARIES ARE ALSO PERFORMING WELL (2/2) • Net profit has grown by 60% in FY 08 to Rs 95.9 crore SBI DFHI • ROE increased y-o-y from 6.1% to 9.3% • Market share up y-o-y from 8.3% to 10.5% • The company maintained and reinforced its leadership position in the Primary Dealer segment of the d
Slide 27: SBI Group profit nears Rs 9,000 crore
SBI GROUP PROFIT NEARS RS 9,000 CRORE Rs crore FY07 FY08 Y-o-Y Growth Interest earned 54,363 71,495 31.5% Other income 12,761 18,722 46.7% Total income 67,124 90,218 34.4% Interest expended 32,730 47,994 46.6% Operating expenses 20,002 23,943 19.7% Provisions and contingencies 7,772 9,119 17.3% Tota
Slide 28: SBI Group balance sheet exceeds Rs 10 lakh crore (USD 250 bn)
SBI GROUP BALANCE SHEET EXCEEDS RS 10 LAKH CRORE (USD 250 BN) Rs. in crore Mar 31, Mar 31, Y-o-Y 2007 2008 Growth Cash and balances with RBI 45,066 74,817 20.0% Balances with banks and money at call and short notice 27,411 14,211 44.3% Investments 216,521 273,842 20.0% Advances 487,286 603,222 22.0%
Slide 29: Thank You
‘Wank You State Bank of India \ With you ~ all the way