It gives me immense pleasure to place before you the highlights of yourBank's performance during FY2022. Details of the achievements and initiatives taken byyour Bank are provided in the enclosed Annual Report for FY2022.
After witnessing significant contraction related to COVID-19 pandemicin 2020 global economy recovered in 2021. However the momentum was slowed down in Q2 bya deadlier variant of the virus the impact of which was fortunately short lived helpedlargely by main vaccination drives across the world. Towards the end of Q4 FY2022escalated geopolitical tension arising from prolonged Russia-Ukraine conflict has led toincreased financial volatility. Oil and other commodity prices have surged significantlythereby worsening the already high inflation dynamics of both advanced as well asemerging/developing economies. Record inflation has led the US Fed to accelerate itsmonetary policy normalisation. This in turn has led to capital outflows from theemerging markets as risk-off takes centre stage. Global growth is thus expected tomoderate to 3.2% in 2022. Even the global trade estimates for 2022 have been reviseddownwards to 3.0%.
Against this backdrop the Indian economy grew by 8.7% in FY2022. Onthe external front our merchandise exports performance remained buoyant growing by 14.53%and crossing the $400 billion mark in FY2022. However imports growth too remained strongat 55% during the year.
Meanwhile RBI increased the repo rate recently by 40 bps in anoff-cycle meeting to rein in inflation while supporting growth. However hardening ofglobal crude and commodity prices amidst prolonged geopolitical tensions along withsupply chain issues arising out of prolonged lock down in China could keep inflationarypressures on the upside. While India is expected to grow at 7.2% in FY2023 the currentaccount deficit could breach 2.5% of GDP mainly due to geopolitical tensions and elevatedcrude oil prices.
Your Bank?s Performance
With the gradual improvement in economic activity your Bank's businesshas continued to show double digit growth in FY2022.
During FY2022 your Bank's total deposits grew by 10.06% to surpass the'40 lakh crore mark of which domestic deposits grew by 9.80% to '39.20 lakh crore. TheCASA deposits grew by 7.78% to '17.75
lakh crore contributed mainly by sustained growth of 10.45% in savingbank deposits. Amidst the low interest rate environment CASA ratio of your Bank stood at45.28% as of March FY2022. During the year your Bank opened 98.75 lakh new Savings BankAccounts of which 63% have been opened through the YONO portal / app.
During FY2022 your Bank's advances grew by 11% to '28.18 lakh crorecompared to growth of 4.8% in FY2021. While domestic advances grew by 10.27% foreignoffices advances grew by 15.42%. The domestic loan growth was led by robust growth of15.11% in retail personal loans which now account for 41.6% of domestic advances. Agri& SME loans grew by 6.57% and 9.52% during the year to '2.28 lakh crore and '3.06 lakhcrore respectively.
The retail personal loans portfolio has crossed '10 lakh crore markdriven by Home loans and unsecured Personal loans which grew by 11.49% and 28.50%respectively during FY2022.
Your Bank's investment portfolio increased by 9.6% to '14.93 lakh crorein FY2022 of which 96% are domestic investments. Within the domestic investmentportfolio 60.77% is in HTM category while the rest is under AFS category. The yield oninvestment is in line with the interest rate scenario and has come down to 6.07% from6.32% in FY2021.
During FY2022 as the economy recovered from the effects of COVID-19during the second half your Bank's performance displayed a smart recovery. The standalonenet profit has increased by 55% over previous year to '31676 crore in FY2022. Your Bankhas also registered improvement on the asset quality front provision coverage and NIM.
The Net Interest Income of the Bank registered a healthy growth of9.03% over the previous year to '120708 crore. Growth in the lending book togetherwith control in slippages have contributed to higher interest income. Credit costs havealso declined significantly by 57 bps to 0.55% in FY2022. The Operating Profit of yourBank for FY2022 was '75292 crore in FY2022 an improvement of 5.22% over the previousyear. The cost to income ratio has also declined marginally to 53.31% in FY2022 from53.60% in FY2021.
Return on Assets increased by 19 bps to 0.67% in FY2022 compared to0.48% in FY2021. There was a significant improvement in Return on Equity which moved up by398 bps to 13.92% in FY2022 from 9.94% in the previous year.
The focus on managing stressed assets continued in FY2022 with allround improvement in every segment.
Your Bank has calibrated its strategy for managing stressed assets inline with eco system and was able to contain the slippage ratio within 1% in FY2022.
During FY2022 your Bank's gross non-performing assets (NPA) came downby '14 366 crore to '112023 crore. Recoveries and upgradation during the year increasedby 21.58% to '21437 crore. Consequently the gross NPA ratio of the Bank improved by 101bps from 4.98% in March 2021. The net NPA of the Bank also improved to 1.02% as of March2022.
The provisioning coverage ratio (PCR) of the Bank also improved to75.04% as of March 2022 from 70.88% last year. Including AUCA the PCR stood at 90.20% asof March 2022.
The capital ratios of the Bank improved during the last financial yearon the back of better planning internal accruals and efficient risk management of thebanking book. Capital Adequacy Ratio (CAR) as at the end of March 2022 stood at 13.83% animprovement of 9 bps over March 2021.
The Tier II capital base also improved to 2.41% in March 2022 from2.30% in the previous year.
I am happy to announce that the Board of Directors of your Bank hasdeclared a dividend of '7.10 per equity share (i.e 710%) for the financial year endedMarch 31 2022.
We believe that the evolving customer expectations and shiftingcustomer sentiments demand an agile approach that adapts to the evolving situation. Todayyour Bank is focused on leading the FinTech charge by leveraging digital transformationand customer engagement in innovative ways. To build and sustain the momentum fortransforming India your Bank has created the highest number of touchpoints at branchesand other outlets.
As of March 22 your Bank has 22266 branches over 68000 BusinessCorrespondents and over 65000 ATMs including 12872 Automated Deposit & WithdrawalMachines (ADWMs). On an average over 1.32 crore transactions are carried out every daythrough these ATMs / ADWMs.
To enhance customer convenience and customer delight the following newfacilities were introduced during the FY2022:
(a) Facility to request for new cheque book and stop cheque request hasbeen enabled at CSP outlets
(b) The facility of blocking of debit card has been enabled at CSPoutlets.
With a presence across all time zones through its 227 locations in 30countries your Bank remains a front runner of International Banking among Indian banks.During FY2022 your Bank continued rationalising its overseas operations by a closure ofan overseas Subsidiary- SBI Botswana Ltd and merger of the Ilford branch of SBI UK Ltd.with its East Ham branch.
Technology & Innovation
The future of banking is in the realm of technology. Surge intechnology adoption since the outbreak of COVID-19 pandemic has prompted your Bank to takeseveral initiatives in the technology domain with a view to improve user experience andaddress emerging risks.
Your Bank has been working on upgrading ATM connectivity by arranging4G connectivity to off-site ATMs. Your Bank is continuously working to improve the networkexperience and minimise outage. Alternate Secondary Links to the branches and offices havebeen put in place to reduce and eliminate downtime.
Your Bank has also devised an early warning and insights mechanismrelated to cybersecurity threats to comply with the RBI Cyber Security Framework byarranging a honeypot solution.
On the product side your Bank has over the years developed a strongportfolio of products and services and leverages technology to deliver and manage them ina personalised and customer centric manner. Your Bank is leveraging data analytics to gaina 360-degree view of the customer journey to customise need based financial products andservices. Your Bank is simultaneously using technology to capture deeper insights toaddress customer pain points at various touchpoints.
Your Bank's flagship digital platform YONO is delivering cutting-edgedigital services to millions of retail customers farmers corporate clients and tocustomers of select overseas offices. To increase penetration and nudge customers intoadopting technology the YONO Lite app is now available in 12 Indian languages while theYono Krishi app is available in 10 Indian languages.
Given the technology capability your Bank has participated in variousmetro railway transit projects to digitise micropayments. Your Bank has been awardedNagpur Metro Noida Metro and MMRDA Lines 2A and seven metro projects to implement qSPARCtechnology on the RuPay platform.
Retail Loan Management Solution (RLMS) and Vendor Verification Module(VVM) were introduced in loan processing to ensure uniform underwriting standardsseamless delivery and end-to-end digitisation aimed at providing customer delight. Furtherdigitisation of the entire home loan journey is at an advanced stage. In-house developeddigital platforms like YONO and OCAS/RAAS are being promoted extensively as resource toolsto maximise home loan business and increase our market share.
Your Bank has introduced Trade Regulatory Reporting and ComplianceSolution (TRRACS) applications which has led to a reduction in pending EDPMS/ IRMs/ExportAdvances entries over a period of time.
For seamless cross border transitions your Bank has completedintegration with the real-time payment system in Singapore namely G3-FAST. This willenable payment processing on a real-time basis enhancing the ability to deliver innovativeand commercially attractive products while minimizing settlement risk.
Your Bank has also embarked upon a complete revamp of its e-Banking webplatform for its overseas operations. Aiming to achieve dual objectives of cost-saving andincreased efficiency centralisation and off sharing of back-office processes has gainedmomentum with the migration of jobs from two more geographies i.e. Canada and Singapore(in addition to UK and Bahrain).
The use of technology has also percolated in operations with migrationof many task specific technology platforms. Various new IT initiatives have been rolledout in SARG vertical for better monitoring of legal cases in stressed accounts. This willfurther strengthen the transparency and efficiency of the recovery process.
Strategic / New Initiatives
During FY2022 your Bank has continued undertaking strategicinitiatives to achieve the long-term objectives set by the Bank. Some of the importantinitiatives are:
Your Bank launched Samarthya' an engagement programme forall employees in the age group of 35 or below. The programme has been offered through aunique - "Smart Classroom". Both Officers and Clerical staff attend theprogramme promoting cross-pollination of perspectives and ideas. Over 67000 employees areto be trained under the programme and 72% have already been covered in FY2022.
Two new End-to-End Digital Loan Journeys were introduced viz.Pre-approved Two-Wheeler Loan (SBI Easyride) and Pre-approved Business Loan (PABL) for PoScustomers of our subsidiary SBI PSPL (SBI Payment Services Pvt Ltd.). Loans aggregating'21898 crore have been extended digitally through Analytics-based products in FY2022.
To enhance the level of knowledge of the frontline staff andenhance customer experience your Bank has introduced a mass knowledge enhancementprogramme "Project Utkarsh" It has also introduced the "Customer ServiceIndex" for categorizing branches based on the quality of customer service.
For opening new accounts in most customer categories (Individual& Non-individual) quickly and efficiently image-based processing has
been introduced in the year 2021-22. For the convenience of customersaccount opening facility through Video KYC was launched on 22.04.2021. About 6.40 lakhaccounts have been opened through this facility till March 2022.
A facility for SMS alerts in 13 languages has been enabledfacilitating customers to register for SMS alerts in their preferred language. Multipleinitiatives like multi-streaming of SMS outflow from CBS to Delivery Platform infraupgradation for handling a higher volume of SMS and modifying SMS generation andtransmission processes in CBS to handle higher volumes have been taken to reduce delays inSMS delivery.
Functionality of Video Life Certificate was launched in November2021 to facilitate submission of Life Certificate by pensioners through Video Calling.
A new application for loan collection was launched in April2021 for recording the follow-up calls to delinquent account holders. During the currentyear 2.55 crore calls were made using this application.
A mentoring program for new female employees was launched duringthe year to ensure their smooth transition in the organisation.
Your Bank is actively onboarding customers on the FX-Retail platformrolled out by CCIL (Clearing Corporation of India Ltd.) through which customers benefitfrom transparent and competitive pricing. Your Bank has also made FX-All and e-Forextrading platforms available to customers.
Through its subsidiaries your Bank provides a wide range / bouquet offinancial products and services to its customers.
On a standalone basis SBI Capital Markets Limited posted a PAT of'339.70 crore for FY2022 as against '273.25 crore for FY2021. On a consolidated basis itposted a PAT of '620 crore against '527 crores in the previous year. SBICAP SecuritiesLimited the broking arm of SBI Group posted a net profit of '233.01 crore during theyear ended FY2022 as against '207.12 crore in FY2021.
SBI General Insurance Company Limited has expanded its presence panIndia through 137 branches. To date the company serves around 8.7 crore customers. Itregistered a growth rate of 11% in FY2022 with a market share of 4.15%. It is ranked 7thamongst private insurers and 12th in the overall industry. It has generated anet profit of '131 crore in FY2022.
SBI Life Insurance Company Limited has retained its pole position inFY2022 amongst private life insurance companies in Individual New Business PremiumIndividual Rated Premium Total Rated Premium and Total New Business Premium. The companywitnessed 23.4% growth in Total New Business Premium (NBP) vis-a-vis the industry growthof 12.9%. The company registered PAT of '1506 crore in FY2022 against PAT of '1456 crorein FY2021.
SBI Cards & Payments Services Limited delivered PAT of '1616 crorein FY2022 a y-o-y growth of 64% over FY2021.
SBI Funds Management Limited is among the fastest- growing AMCs in thecountry and has grown 28.3% in FY2022 against the industry average of 19.5%. It has one ofthe largest investor base with over 107 lakh live investor folios including 31.50 lakhnew folios added in FY2022. It posted PAT of '1070.65 crore during FY2022 as against'860.40 crore last year.
SBI Global Factors Limited which provides factoring services forDomestic and International trade registered a turnover of '4773 crore for FY2022 ascompared to turnover of '4352 crore in FY2021.
SBI Pension Funds Private Limited is one of the seven Pension FundManagers (PFMs) appointed for the management of Pension Funds under the Private Sector.The company's total Assets Under Management (AUM) as of 31st March 2022 stoodat '282476 crores (y-o-y growth of 26.89%). The company holds the leadership positionamongst PFMs with a market share of 38.35%.
Recognition & Awards
Your Bank's efforts in various areas of banking were acknowledged andit has won various awards during the year. Your Bank was recognised as "Best CashManagement and Transaction Bank in India" by Asian Banker Magazine Singapore underTransaction Finance Awards 2021. Your Bank has also been awarded the "Best TradeFinance Provider (India)-2022" for the tenth consecutive year by Global FinanceMagazine. Your Bank won Gold in the prestigious ET Human Capital Awards under the categoryExcellence in Creating a Culture of Continuous Learning and Upskilling'.
Your Bank has been awarded the coveted Kirti Puraskar by the Governmentof India for Best implementation of Rajbhasha among Public Sector Banks.
Environmental Social & Governance (ESG) Practices
The objective of Corporate Social Responsibility (CSR) policy in yourBank is "to participate in activities which benefit community development socialresponsibility and environmental sustainability and reach out to socially &economically disadvantaged sections of society". During FY2022 the total CSR spendstood at Rs.204.10 crore (1% of the net profit of Rs.20410 crore for FY2021) withRs.102.56 crore allocated to the SBI Foundation. The focus areas of the Bank's CSRactivities for FY2022 included Rural and Slum area development Health Care andSanitation Education Environment Sustainability Tribal Welfare Empowerment of Womenand Senior Citizens and supporting sports and athletes.
Your Bank has spent a total of '71 crore i.e. 35% of the total CSRspends towards the fight against COVID-19.
Your Bank is also committed to adapt to the "BusinessResponsibility and Sustainability Report (BRSR)" framework in accordance with thedirectives issued by the Securities and Exchange Board of India (SEBI) in this regard.
In line with the country's vision and global need for promotingRenewable Energy (RE) your Bank is also underwriting RE financing in a big way. TheFY2022 saw the dual listing of SBI's Green Bonds worth USD 650 million on the IndiaInternational Exchange and the Luxembourg Stock Exchange. Your Bank has also shown itsdeep commitment to engaging with communities NGOs and aligning with the nationalpriorities to further environmental sustainability efforts. During the FY2022 more thansix lakh trees were planted by your Bank across the country.
Overall FY2022 has been a much better year compared to FY2021. The paceof economic activity has picked up and the momentum is expected to continue.
Nevertheless FY2022 was not without its share of surprises. Theoutbreak of hostilities between Ukraine and Russia towards the end of FY2022 has severelyaffected the global economic landscape.
A panoramic view of the Bank's financial performance over the last fewyears shows discernible improvement in all parameters. Thus despite the challenges posedby the operating environment your Bank today has better loss absorbing capability. Bank'srisk management practices have delivered better results especially in containing theslippages.
The time is therefore opportune to undertake the much-neededtransformation of the Bank with an eye on emerging trends in banking especially in India.Your Bank will thus continue to accelerate its digital agenda both in front and backoffices. The scope and reach of SBI YONO will be expanded further and with enhanced userexperience. In business operations your Bank will leverage advanced analytics for deeperinsights on internal data and its best possible usage. Mutually beneficial partnershipswith fin-techs and NBFCs will be explored further to increase penetration and reach of theBank.
Your bank is comfortably placed in terms of growth capital in thecurrent year. Opportunities for lending in promising sectors such as sectors identifiedunder PLI scheme and renewables as well as electric mobility will be explored to diversifythe portfolio.
Summing up despite the economic headwinds your Bank has adapted wellto the challenges posed by the operating environment. I am more than hopeful that theperformance achieved in FY2022 will show further improvement in FY2023.
Dinesh Kumar Khara