MUMBAI: State Bank of India (SBI) is planning to optimise costs by rethinking the role of branches to see what activities and processes currently performed there can be centralised.

As part of the exercise, the nation’s largest lender will appoint a consultant to suggest strategies to optimize balance sheet and maximize return on asset and pre-provisioning operating profit, a document seeking bids showed.

This comes at a time when banks are increasingly looking at deployment of technology to cut down on physical infrastructure cost.

As part of its public sector bank reform agenda announced in January 2018, the government said that banking from home and mobile will progressively make brick-and-mortar branch visits redundant.

“Promote digital banking, such as internet banking, mobile banking, integrated mobile apps and phone banking," the government said in the reform agenda.

The SBI document added that the consultant would require to identify long-term growth opportunities for the bank, strategies for current account acquisition and increasing its balances.

“The consultant should perform an upfront diagnostic to identify opportunities that have the potential to improve bank’s return on assets (RoA) and pre-provisioning operating profit (PPOP) by performing a detailed design for mutually selected opportunities," the bank said.

In this process, the bank wants to benchmark overall portfolio with peer banks, identify opportunities for improvement in share of high-yield products like personal loans and business loans.

SBI posted a net profit of 3,954.81 crore in the December quarter, the highest in seven years. Net profit rose on account of improved asset quality and strong net interest income (NII) growth.

Net interest income, or the difference between interest earned on loans and that paid on deposits, rose 21.42% to 22,690.99 crore, from 18,687.52 crore in the corresponding period last year.

Other income, which includes core fee income, dropped 0.61% to 8,035.23 crore in the three months from 8,084.17 crore a year ago. The state-run lender has deposits of over 28 trillion and advances of more than 20 trillion as on 31 December 2018.


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