SBI Chairman outlines future strategies, emphasizes digital transition

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SBI Chairman outlines future strategies, emphasizes digital transition
Credit: © Reuters.

State Bank of India (SBI) Chairman, Dinesh Khara, recently addressed the bank's future strategies and the importance of digital transformation at the Business Standard BFSI Insight Summit 2023. The plans include proactive balance sheet stress provisioning and the introduction of a new role, assistant general manager (deposit), across all branches to boost income and improve customer guidance.

The SBI network, which includes 22,500 branches and over 500 regional offices, serves a diverse clientele. The bank's balance sheet currently totals Rs 60 trillion. Khara emphasized the significance of cost-effective deposit mobilization in shaping lending trajectories and revealed SBI's domestic and international credit deposit ratios as 64-65% and 72% respectively.

SBI is focusing on technology to expand customer reach and meet evolving expectations. With its representation in the Indian economy standing at 20%, the bank serves nearly 480 million customers. A significant portion of these transactions, 84%, are conducted digitally and about 97% outside branches.

The bank is committed to technological upgrades with an aim to create a digital bank within the existing structure. The upcoming YONO 2.0 platform, expected to launch in the next 8-9 months, is designed to enhance consumer capacity and provide a modular structure for optimal product delivery. The current YONO platform sees around 10 million daily users.

To further improve customer service, SBI has implemented net promoter score evaluations across its branches to foster competition among employees. Khara also discussed SBI's dominance in current account and savings account (CASA) holdings and strategies to maintain or enhance this market share.

In conclusion, Khara revealed that SBI's provision coverage ratio stands at 92-93%, reaching up to 96-97% at the corporate level. He also disclosed a minimal gross NPA of 0.70%, demonstrating the bank's robust asset quality.

InvestingPro Insights

Drawing on real-time data from InvestingPro, we can gain further insight into the financial health and performance of SBI. As of Q2 2023, SBI's market cap is adjusted at 98.26M USD, and it has a P/E ratio of -84.46. This suggests that the bank is currently trading at a low earnings multiple, as highlighted by one of the InvestingPro Tips.

In terms of revenue, SBI has demonstrated a positive trend with a growth rate of 5.67% over the last twelve months as of Q2 2023. This aligns with another InvestingPro Tip that indicates SBI's revenue growth has been accelerating. However, it's worth noting that analysts predict a potential sales decline in the current year.

Lastly, SBI's dividend yield as of 2023 stands at 4.03%, which is a testament to its high shareholder yield, a factor that has been consistently highlighted in the InvestingPro Tips. Keep in mind, these are just a few insights. InvestingPro offers a wealth of additional tips and data metrics for SBI and other companies to help guide your investment decisions.

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