SBI earns ₹1.6 trillion PAT in 4 years under Khara, higher than previous 64 years

State Bank of India's profit after tax (PAT) for the past four years has surpassed the cumulative profit earned over the previous 64 years, according to chairman Dinesh Kumar Khara.

“In the last four years, we have earned a net profit of ₹1.63 trillion. The same for the 64 years before that was ₹1.45 trillion,” Khara said at the Q1 earnings press meet, responding to a question on his proudest achievement during his term.

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When Khara assumed office, the annual profit for the public sector lender was around ₹14,000 crore. This has now risen to a PAT of ₹17,000 crore per quarter, he added.

Khara's ambition

Khara, who has been at the helm of the bank since October 2020, is set to step down at the end of his term later this month.

“My ambition was to see SBI generating ₹1 trillion profit after tax. Last year (FY24), we were about ₹80,00 crore, and the kind of trajectory which we are following this year (FY25), I believe it is likely to be a reality.”

The significant improvement in profitability is attributed to resolving operational issues in lending, boosting other income, and enhancing employee productivity.

SBI's per employee business has grown from ₹24 crore to about ₹38 crore in the past four years, while profit per employee has grown nearly six times to around ₹30 lakh.

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Khara, however, believes the bank is being undervalued by the market. While he acknowledged that valuation is ultimately determined by the market, he expressed dissatisfaction. “I am not happy; how can I be happy? We are not getting our right value, it should be higher, look at the other players."  

When asked which peer he would like to be benchmarked against, Khara said SBI was a benchmark in itself due to its network of over 22,000 branches, strong brand presence, substantial balance sheet, comfortable liquidity buffers, and future growth potential.

According to Khara, the average balance in SBI’s savings accounts is three times higher than that of its nearest competitor, having increased from ₹12 trillion in March 2020 to around ₹17 trillion in June.

Banking application

On the rollout of SBI's second generation mobile banking application, YONO 2.0, Khara said the bank is upgrading the app and will soon launch a beta version for testing.

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"YONO 2.0 may not be released all at once; it will be rolled out incrementally." Khara said even so, the current YONO app already offers many new capabilities, resulting in "excellent" platform performance.