The Chairman of State Bank of India (SBI), CS Setty, shared that the bank’s goals for profit, known as Return on Equity (ROE) and Return on Assets (ROA), remain on track. He pointed out that in the same quarter last year, the bank set aside ₹7,100 crores for pension costs, which was a one-time expense. Even considering that cost, SBI’s results still look good.
Setty explained that the bank’s Net Interest Income (NII), which is the money made from lending after subtracting costs, has been affected recently because the cost of borrowing money is rising. However, he believes that these costs will stabilize, allowing NII to improve in the future.
Regarding ROE and ROA, SBI has consistently performed well, showing an ROE above 20%. While they aim to maintain this level, they are sticking to their target of 15% for ROE.
Setty also mentioned the impact of market fluctuations on the bank’s profits. Last quarter, the bank experienced both positive and negative adjustments that affected their overall numbers.
Looking ahead, he said that the bank expects to grow anywhere from 14% to 16% this year, especially in areas like small businesses and agriculture, where they see potential for growth due to recent government budget proposals.
About new government rules that affect taxes on certain deposits, Setty explained SBI has a large share in that market, which might work out positively for them.
Finally, with upcoming rate changes from the Reserve Bank of India, Setty predicts a slight cut of about 0.25%. However, he doesn’t believe this will significantly affect SBI because most of their loans aren’t directly tied to those cuts.
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