THE COUNTRY'S LARGEST lender State Bank of India (SBI) on Saturday reported a 35% year-on-year (YoY) decline in its net profit for the quarter ended December at ₹9,164 crore, impacted by higher pension costs and wage revisions. The Q3FY24 net profit was lower than Bloomberg consensus estimate of ₹13,326 crore for the reporting quarter.
The bank made ₹7,100 crore of one-time expense for providing pension at a uniform rate of 50% for all pensioners, and for providing ex-gratia benefit and neutralisation of dearness relief to all pre-November 2002 retirees and family pensioners.
The Indian Banks' Association (IBA) and bank unions in December agreed on a 17% wage hike for state-owned bank employees. Accordingly, SBI made ₹6,313 crore of incremental provisions during Q3 for the revision and has cumulatively provided a total amount of ₹15,207.82 crore till December 31 towards the settlement. The lender will make another ₹5,409 crore of provisions in Q4 for wage revision, chairman Dinesh Khara said in a postearnings conference.
FE had in January first reported that after making cumulative provisions to the tune of ₹9,000 crore till Q2FY24, SBI will likely make additional provisions of ₹11,000 crore towards meeting 17% wage hike revision in H2FY24.
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