Shares of State Bank of India (SBI) rose nearly 1% in opening trade on Monday amid a report that the country’s largest commercial lender is planning to hire 10,000 new employees and open 600 branches during the current financial year to improve its operations. The public sector bank has recently announced around 1,500 technology people recruitment both at the entry level and slightly at the higher level.
The sentiment was further boosted after Moody’s Investor Service affirmed ‘Baa3’ long-term local and foreign currency bank deposit ratings of SBI with a stable outlook. It has also affirmed SBI's Baseline Credit Assessment (BCA) and Adjusted BCA to ba1, the bank said in an exchange filing on October 3.
Reacting to the news, shares of SBI opened a tad higher at ₹797.05 after ending 0.28% higher at ₹796.60 on the BSE on Friday. In the early trade, the stock gained as much as 0.9% to ₹803.90, while the market capitalisation rose to ₹7.11 lakh crore.
At the current level, the shares of SBI trade 14.5% lower than its 52-week high of ₹912.10 touched on June 3, 2024. The banking heavyweight touched a 52-week low of ₹543.15 on October 26, 2023. The counter has risen 36% in the past one year; 24% in the calendar year 2024. In the last six months, the stock has added 3.5%, while it gained over 1% in a month.
"We are strengthening our workforce, both on the technology side as well as on the general banking side. We have recently announced around 1,500 technology people recruitment both at the entry level and slightly at the higher level," SBI chairman C S Setty told PTI in an interview.
"Our technology recruitment is also on specialised jobs like data scientists, data architects, network operators etc. We are recruiting them for a variety of jobs in the technology side...So, in all, our current year requirement will be around 8,000 to 10,000 people. Head count will be added to both specialised and general sides," he said.
As of March 31, 2024, SBI had employees count of 232,296, down from the 235,858 in the previous fiscal. Of this, 110,116 people were on the rolls of the bank at the end of FY24.
The SBI chairman also said that the bank is also planning to open 600 branches across the country in the current financial year. SBI has a network of 22,542 branches across the country as of March 2024.
In the current fiscal, the public sector lender has raised a total of ₹15,000 crore through the issuance of Tier-2 bonds in two equal tranches to meet regulatory requirements and support business growth. In September, it raised ₹7,500 crore via Basel III bonds, at a coupon rate of 7.33%, while it garnered another ₹7,500 crore through its first Basel III compliant Tier 2 bond issuance at a coupon rate of 7.42% in August 2024.
In June this year, the public sector bank announced that it would raise up to ₹20,000 crore in the current financial year by issuing long-term bonds through a public or private placement. The bank last raised equity capital of ₹15,000 crore from the market in FY18.
For the June quarter of FY25, SBI reported a net profit of ₹17,035 crore, up 0.89% YoY. The operating profit grew by 4.55% YoY to ₹26,449 crore. The net interest income (NII) surged 5.71% YoY, while the whole bank net interest margin (NIM) was 3.22% and domestic NIM was 3.35%.
In terms of the balance sheet, the SBI’s credit growth was up by 15.9% year-on-year (YoY) at ₹37.5 lakh crore as on June 30, 2024, from ₹32.4 lakh crore as on June 30, 2023. The increase was driven by the healthy credit offtake across segments such as retail personal, agriculture, small and medium enterprise (SME) and the corporate sector. SBI holds a dominant position in the home loan and auto loan segments with a market share of over 26% and 20%, respectively, as on June 30, 2024, and an overall market share of 22.6% in the advances of the Indian banking sector as on March 31, 2024.
As of June 30, 2024, SBI’s loan book was dominated by retail personal advances, which constituted 35.89% of its gross advances followed by corporate advances (excluding SME) at 29.88%, SME advances at 11.62% and agriculture advances at 8.11%. The international loan book constituted 14.51% of its gross advances as on June 30, 2024.
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