INVESTOR UPDATE - State Bank of India UPDATE January 2014 The Banker to Every Indian | 1 ... State...

INVESTOR UPDATE

January 2014

The Banker to Every Indian

| 1

Disclaimer

This document does not constitute or form part of and should not be construed as an offer to sell or issue or the solicitation of an offer to buy or acquire securities

of the Bank or any of its subsidiaries or affiliates in any jurisdiction or as an inducement to enter into investment activity. No part of this document, nor the fact

of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This document is

not financial, legal, tax or other product advice.

This document has been prepared by the Bank based on information available to them for use at a non-deal road show presentation by the Bank for selected

recipients for information purposes only and does not constitute a recommendation regarding any securities of the Bank. The information has not been

independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy,

completeness or correctness of the information or the opinions contained herein. None of the Bank or any of its affiliates, advisors or representatives shall have

any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection

with the document.

The statements contained in this document speak only as at the date as of which they are made, and the Bank expressly disclaims any obligation or undertaking to

supplement, amend or disseminate any updates or revisions to any statements contained herein to reflect any change in events, conditions or circumstances on

which any such statements are based. By preparing this presentation, none of the Bank, its management, and their respective advisers undertakes any obligation to

provide the recipient with access to any additional information or to update this presentation or any additional information or to correct any inaccuracies in any

such information which may become apparent.

This presentation is not an offer of securities for sale in the United States or any other jurisdiction. Securities may not be offered or sold in the United States

absent registration or an exemption from registration.

This presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Bank, which are expressed in

good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the

actual results, financial condition, performance, or achievements of the Bank or industry results, to differ materially from the results, financial condition,

performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, recipients of this

document are cautioned not to place undue reliance on these forward-looking statements.

Any reference herein to "the Bank" shall mean, collectively, State Bank of India and its subsidiaries, associates and joint ventures.

| 2

Executive Summary ▪ India’s GDP growth has been resilient through difficult times and is expected to revive as long term fundamentals

remain Intact

▪ Indian banking sector has remained strong in current environment and is now poised for the next phase of growth

▪ SBI is the country champion in the banking sector

▪ Largest Indian bank with a global footprint – Amongst very few banks which straddle all segments of the

economy

▪ Strong retail franchise

▪ Large branch network driving stable customer deposit growth & low leverage balance sheet expansion

▪ Leadership position in auto and home loan segments

▪ Well diversified loan portfolio

▪ Focus on asset quality

▪ Robust balance sheet with strong and improving capital levels

▪ Well positioned to reap the benefits of the Government of India’s financial inclusion initiatives

▪ Financial services conglomerate with significant presence across segments – successful subsidiaries built with

collaboration

▪ Strategy for a safe and profitable growth – enhancing distribution, targeting youth, focus on investment grade

corporates, cross-selling and greater synergies with subsidiaries

▪ Key new initiatives

▪ IT underpinning all initiatives whether it be ensuring delivery standards or customer acquisition or NPA

management

▪ Build a strong risk culture for the Bank

▪ Increased cost consciousness in the organization

▪ Collaborative human resources practices

|

Table of Contents

3

Indian Macro & Banking Sector Overview

Key Investment Highlights

Strategy Going Forward

Key Financials

| 4

Indian Macro & Banking Sector Overview

| 5

0.7% 1.7%

4.4% 4.7% 5.3% 7.1% 7.4% 7.6%

9.3%

13.0%

15.6%

Tu

rke

y

US

A

So

uth

K

ore

a

Ru

ssia

Ja

pa

n

Bra

zil

Th

aila

nd

So

uth

A

fric

a

Ind

ia

Ind

on

esia

Ch

ina

50 51 67 74 128 144

199 247

314

1,237

1,351

So

uth

K

ore

a

So

uth

A

fric

a

Th

aila

nd

Tu

rke

y

Ja

pa

n

Ru

ssia

Bra

zil

Ind

on

esia

US

A

Ind

ia

Ch

ina

2012 Population (mm)

2008 – 2012

Population

CAGR (%)

0.2% 0.8% 1.3% 0.3% 0.9% 1.3% (0.0%) 0.5% 1.2% 0.5% 1.3% 2012 GDP

per Capita

(US$ ‘000)

GDP per Capita CAGR (2008-2012)

Rising affluence coupled with saving habit of Indians will support growth for banking sector

14.0 46.7 5.5 7.5 1.5 11.3 6.1 22.6 10.7 3.6 51.7

15.2% 15.7% 16.2% 16.4% 18.6%

27.9% 30.6% 30.9%

33.3% 34.5%

51.6%

Tu

rke

y

US

A

Bra

zil

So

uth

A

fric

a

Ja

pa

n

Ind

ia

So

uth

K

ore

a

Th

aila

nd

Ru

ssia

Ind

on

esia

Ch

ina

Gross Domestic Savings / GDP(2012)

India Macroeconomic Overview Strong Demographic Tailwinds Supporting Indian Growth Story

SOURCE:

1. The World Bank - Data for 2012 , 2. Reserve Bank of India, Handbook of Statistics on Indian Economy 2012-13, 3. World Bank “World Development Indicators” database

updated December 18, 2013. Fiscal year ending March 31 for India growth corresponds to calendar year ending December 31 for Global growth i.e. FY06 corresponds to

CY05 ,4 . Planning Commission - India - Macro-economic Summary : 1999-00 to 2013-14 (on 1st December, 2013), 5. Source: RBI Macroeconomic and Monetary

Developments Second Quarter Review 2013-14 & CSO Press Note on Quarterly Estimates of GDP for the Second Quarter (29 November, 2013)

Large and Growing Population Base1 Rising Affluence1 Strong Habit of Savings1

High Historical Growth Rates

Real GDP growth Y-o-Y (%)2,3

9.5% 9.6% 9.3%

6.7%

8.6% 9.3%

6.2% 5.0%

3.6% 4.0% 3.5% 1.4%

(2.1%)

3.3%

2.7% 2.0%

FY06 / CY05

FY07 / CY06

FY08 / CY07

FY09 / CY08

FY10 / CY09

FY11 / CY10

FY12 / CY11

FY13 / CY12

India GDP Growth Global GDP Growth

Reduced Volatility in Recent Decades Agri Sector also Reviving

3.5% 4.1% 4.5% 5.7% 6.1%

8.0%

(6.0%)

(4.0%)

(2.0%)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1960s 1970s 1980s 1990s 2000-05 2006-13

Historical variation in real GDP growth (%)2

GDP period average Range during period

30.2%4

(per GoI data)

2.9%

1.7% 1.8%

1.4%

2.7%

4.6%

Q1 - FY13 Q2 - FY13 Q3 - FY13 Q4 - FY13 Q1 - FY14 Q2 - FY14

Real agricultural GDP growth (%)5

|

3.3% 2.5% 6.0% 6.5% 4.8% 5.7% 4.9% 4.8%

61.4% 58.9% 58.6% 56.3% 52.1% 51.9% 51.9% 51.1%

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14E

199.2

309.7

252.0 279.1

304.8 294.4

292.0 274.8

295.5

FY07

FY08

FY09

FY10

FY11

FY12

FY13

6-S

ep-1

3

20-D

ec-1

3

Gross Fiscal Deficit/GDP (Central Govt.)

Central Government Debt/GDP

6

While fiscal deficit is currently high, India

has shown an improving debt profile 1

Improving Debt Profile, Strong FDI Inflows And Healthy Foreign Exchange Reserves

Foreign exchange reserves remain at

high levels

5.5

12.5

24.6

31.4

25.8

21.4

35.1

22.4

12.6

FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 Apr - Oct'13

Net foreign direct investments (FDI) (USD bn) 3 Foreign exchange reserves (USD bn)1,2

India Macroeconomic Overview

▪ Prevailing global uncertainties have affected India’s balance of payments position

▪ While the fiscal deficit has been high historically it has been reducing over the last 2 financial years and is currently down to 4.9% of GDP

▪ 10th highest foreign exchange reserve among rated sovereigns which underpins India’s high liquidity ratio7

SOURCE:

1. Reserve Bank of India, Handbook of Statistics on Indian Economy 2012-13, Macroeconomic and Monetary Developments Second Quarter Review 2013-14, Note: FY13

Gross Fiscal Deficit to GDP based on revised provisional estimate of fiscal deficit provided by Controller General of Accounts, Ministry of Finance, on May 31, 2013

2. RBI. Weekly Statistical Supplement 3. DIPP’s FDI data base – equity capital components only. Factsheet on FDI from April 2000 to Oct 2013 4. RBI – Database on

Indian Economy, 5. Exports & Imports denote Merchandize trade only 6. Values calculated on a 0 to 3 Scale 7. Fitch ratings - Report dated 19.06.2013 on India

2.0

9

2.0

2

1.9

7

1.8

6

1.8

5

1.8

3

1.8

3

1.8

1

1.7

7

1.7

7

1.7

2

1.7

1

1.6

8

1.6

7

1.6

3

US

Chin

a

Bra

zil

Canada

India

Aust

ralia

Germ

any

UK

Mexic

o

Sin

gapore

Russ

ia

Fra

nce

Japan

UAE

South

Afr

ica

ATKearney FDI Confidence Index, 2013 6

FDI has posted healthy growth for over a

decade

India is an attractive destination for FDI Increasing Integration with Global

Economy Diversification of Export Basket

30.9% 33.9%

35.7% 37.8%

38.5%

39.9%

42.5%

37.0% 39.2% 38.2%

40.8% 41.5%

49.3% 50.0%

46.4%

43.7% 44.5%

42.0%

39.5% 36.9%

35.9% 33.2% 33.8% 34.2%

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13

Share of OECD in India’s Total Exports 4

Share of Developing Countries in India’s Total Exports 4

5.7%8.0% 8.0%

13.8% 13.4%16.8%

8.7%

10.7% 11.8%

19.3%22.0%

27.5%

0.6%

2.4%2.6%

7.2% 1.6%

0.7%

15.00%

21.00%22.40%

40.30%

37.00%

44.90%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

FY91 FY95 FY00 FY05 FY10 FY13

Export Import Private Transfers

5.7% 8.0% 8.0% 13.8% 13.4% 16.8% 8.7%

10.7% 11.8%

19.3% 22.0%

27.5%

0.6%

2.4% 2.6%

3.3% 3.8%

3.5%

15.0%

21.0% 22.4%

36.4% 39.2%

47.7%

0%

10%

20%

30%

40%

50%

FY91 FY95 FY00 FY05 FY10 FY13

Export Import Private Transfers

Exports, Imports & Private Transfers as % of GDP 4,5

| 7

India Banking Sector Overview

SOURCE:

1. Economist Intelligence Unit, as of Sep 2013

2. Reserve Bank of India, Handbook of Statistics on Indian Economy 2012-13

3. The World Bank - World Bank “World Development Indicators” database updated December 18, 2013

Indian Banking Sector has Remained Strong in the Current Global Macroeconomic Environment

Has Resulted in Comfortable loans / deposits ratio (%)2

Driven by Growth in Deposits (%)2

28.1%

22.3%

17.5% 16.9%

21.5%

17.0%

14.1%

23.8% 22.4% 19.9%

17.2% 15.9% 13.5% 14.2%

FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY13

Credit Growth (y-o-y) (%) Deposit Growth (y-o-y) (%) 27.3%

20.4% 18.9%

16.1% 15.4%

7.9% 6.3%

Russia India China Indonesia Brazil S. Africa S. Korea

Strong Historical Bank Credit Growth (2007- 2012)1

Lower NPL Levels than Most Peer Countries(2012) 3

6.7%

4.6%

3.6%

3.0%

2.1%

0.9%

Russia S. Africa Brazil India Indonesia China

73.9% 73.9%

72.4% 72.2%

75.7%

78.0% 77.9%

FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY13

Loans/Deposits (%) Bank nonperforming loans to total gross loans (%)

| 8

India Banking Sector Overview Structural drivers in place

…& Under-penetration1 … Low Domestic Credit1

Branches Per 100K Population Domestic Private Credit (% of GDP)

…Has Led to Lower Financial

Participation1

96.4

%

93.0

%

88.0

%

72.7

%

63.8

%

57.6

%

55.9

%

53.6

%

48.2

%

35.2

%

19.6

%

Japan

S.

Kore

a

USA

Thailand

Chin

a

Turk

ey

Bra

zil

S.

Afr

ica

Russ

ia

India

Indonesi

a

183.8

%

176.7

%

151.1

%

148.3

%

148.0

%

133.7

%

68.4

%

54.4

%

51.5

%

48.8

%

35.0

%

USA

Japan

S.

Afr

ica

Thailand

S.

Kore

a

Chin

a

Bra

zil

Turk

ey

India

Russ

ia

Indonesi

a

47.3

38.2

35.3

33.9

18.7

18.4

11.8

11.4

10.4

9.6

7.7

Bra

zil

Russ

ia

USA

Japan

Turk

ey

S.

Kore

a

Thailand

India

S.

Afr

ica

Indonesi

a

Chin

a

SOURCE:

1. The World Bank – G20 Financial Inclusion Indicators updated October 15, 2013

2. International Monetary Fund, World Economic Outlook Database, October 2013

3. India Census 2011

% of age 15+ with account at a formal

financial institution (2011)

… & Under-penetration in Retail

Segments1

20.1

%

19.4

%

16.6

%

8.9

%

8.5

%

7.7

%

7.7

%

7.3

%

6.3

%

6.1

%

4.6

%

USA

Thailand

S.

Kore

a

S.

Afr

ica

Indonesi

a

India

Russ

ia

Chin

a

Bra

zil

Japan

Turk

ey

% of age 15+ with loan from a financial

institution in the past year (2011)

Rising Income Levels to Help Drive

Growth2

82 90

100 112

125 139

155

2012 2013P 2014P 2015P 2016P 2017P 2018P

India’s Nominal GDP Per Capita (INR ‘000s)

11.2%

Supported by Improving Demographic

Profile 3

10.7

%

12.5

%

12.1

%

9.7

%

8.7

%

41.1

%

4.8

%

9.3

%

10.5

%

11.0

%

10.0

%

9.2

%

44.2

%

5.5

%

0 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 64 65 - 100

In 2001 In 2011

Working age

population is now

63.4%, against

59.5% in 2001

Median age of

26.9 years in

2011 against 27.7

in 2001

| 9


| 10


Resilient Operating

Performance

Well Diversified Loan

Portfolio

Focus on Asset Quality

Strong and Improving

Capital Levels

Strong Technology

Platform Driving

Distribution & New

Initiatives

Well Positioned to

Reap the Benefits of

GoI’s Financial

Inclusion Initiatives

Growth Beyond

Banking

Highly Qualified and

Experienced

Management

India’s Largest Bank

with a Global Footprint

1 2

3

4

5

6

7

8

9

| 11

Insurance

SBI Life

State Bank of India

SBI General

State Bank of

Patiala

State Bank of

Travancore

SBI Funds

Management

SBI Global Factors

SBI Cards &

Payment Services

SBI Pension Fund

SBI DFHI

SBI SG Global

Securities

SBI Capital Markets

Capital markets

and others

SBI Payment

Services

Banking

State Bank of

Hyderabad

State Bank of

Mysore

State Bank of

Bikaner and Jaipur

SBI Group 4 alone has more branches than the entire private sector players combined

India’s Largest Bank with a Global Footprint 1

Note: All data on standalone basis as of September 30, 2013

(1) Source: http://money.cnn.com/magazines/fortune/global500/2013/full_list/, SBI is ranked 298

(2) Includes retained earnings (3) Represents total assets (4) SBI Group refers to State Bank of India and its subsidiaries, associates and joint ventures

Only Indian bank in

the Fortune Global

500 list 1

190

international

offices 15,143

branches in

India

32,777 ATMs

in India

Balance

sheet3 of INR

16,758 bn

12.09% CAR 2

9.13% Tier 1

SBI Mutual Fund

Trustee

http://money.cnn.com/magazines/fortune/global500/2013/full_list/

|

8,872 9,822

11,301 12,076

FY11 FY12 FY13 H1 FY14

12

Note: All data on standalone basis.

1. Market Share based on RBI data and Bank data

Domestic Gross Advances (INR bn) Domestic Deposits (INR bn) Domestic Branches (#)

SBI is the country champion in the Banking Sector

12.9%

6,624

7,579

9,095 9,502


17.2%

13,542

14,097

14,816

15,143


4.6%

CAGR (FY11-FY13) Market Share 1

16.8%

India’s Largest Bank with a Global Footprint Leadership In All Aspects Of Banking

1

16.5% 16.3% 16.4% 16.9% 16.7% 16.1% 16.4%

Home Loans

Auto Loans

Corporate Loans

Agri Loans

Government

Business

Mobile Banking

#1

#1

#1

#1

#1

#1

#1 #1 #1

Debit Cards #1

|

Resilient Operating Performance

Note: All data on standalone basis

2

CAGR (FY11-FY13) Net Interest Margin (%)

13

83

117

141

56

FY11 FY12 FY13 H1FY14

77.1% 78.7% 78.3% 76.3%


325

433 443

238


116 121

115

52


16.7%

Fee Income (INR bn) Net Interest Income (INR bn) Operating expenses (INR bn) & cost

to income ratio1

Credit deposit ratio (%) PAT(INR bn) Business per employee (INR mm)

230 261

293

177

47.6% 45.2%

48.5% 56.0%


71 80

94 102


15.7%

3.32% 3.85% 3.34% 3.19%

30.6%

Increase on

account of

• Provisions for

expected

retrospective

hike in wages

• pension

liability due to

increased life

expectancy

(0.3%)

| 14

Strong Retail Franchise – Growth Driven by Stable Low Cost Deposits

Note: All data on standalone basis. CASA takes into account only domestic deposits

1. CASA deposits and CASA ratio based on SBI’s domestic deposits only

2. Market share based on total market size as per RBIs ‘Trends and Progresses in Banking’ reports dated March 2009 to March 2013 and SBI’s total deposits

3. FY12 onwards do not include PF deposits (INR 232.59 bn in FY11) which have been moved to an external trust

Resulting in Limited Requirement for Borrowings Healthy Deposits Fuel Business Growth

3,234 3,598

4,149 4,454

1,071 983

1,106 809 4,305

4,581

5,255 5,263


48.5% 46.6%3 46.5% 43.6%

▪ SBI has historically relied on deposits to fund its business

▪ Reliance on institutional borrowings has remained low over time

▪ CASA deposits increased at a CAGR of 14.9% over last 4 years

▪ Share of retail deposits in domestic deposits(CASA ratio) has

averaged around ~45% over the last few years

▪ This has helped maintain the cost of funds to less than 6.5%

CASA Deposits

(INR bn) 1

10.5%

Resilient Operating Performance 2

Market Share2 FY11 FY12 FY13

Savings Deposits 24.4% 24.1% 24.3%

Current Deposits 20.4% 15.6%3 15.8%

Common Size Balance Sheet FY11 FY12 FY13 H1 FY14

Cash and Balance with RBI 7.7% 4.0% 4.2% 3.7%

Balances with Banks & Money

at Call & Short Notice 2.3% 3.2% 3.1% 3.1%

Investments 24.1% 23.3% 22.4% 23.8%

Advances 61.8% 64.9% 66.7% 65.8%

Fixed Assets 0.4% 0.4% 0.4% 0.5%

Other Assets 3.7% 4.1% 3.2% 3.1%

Total Assets 100.0% 100.0% 100.0% 100.0%

Networth 5.3% 6.3% 6.3% 6.5%

Deposits 76.3% 78.0% 76.7% 77.1%

Borrowings 9.8% 9.5% 10.8% 11.3%

Borrowings & Refinance

outside India 5.5% 5.8% 6.6% 7.4%

Capital Instruments 3.2% 3.0% 2.6% 2.4%

Other Borrowings 1.0% 0.7% 1.6% 1.4%

Other Liabilities & Provisions 8.7% 6.2% 6.2% 5.1%

Total Liabilities 100.0% 100.0% 100.0% 100.0%

CASA RATIO1 CAGR (FY11-13) Current A/C Saving A/C

|

19.2% 18.7%

13.6% 13.7%

12.4% 13.1%

11.9% 11.7%

7.9% 7.0%

6.2% 6.7%

6.8% 6.7%

6.0% 5.7%

3.9% 4.7%

4.8% 4.6%

2.5% 2.9% 3.2% 2.7% 1.3% 1.6%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Sept '12 Sept '13

Comm. Real Estate

Engineering

Auto Loans

Textiles

Petroleum & Petrochemicals

Trade

Services

Iron & Steel

Other Retail Loans

Direct Agriculture

Infrastructure

Home Loans

Other Industries

Large Corporate

17.4%

Mid Corporate

19.3%

SME 13.9%

Agri 10.7%

Retail 19.7%

International 16.6%

Other 2.5%

15

Well Diversified Loan Portfolio 3

Well diversified loan portfolio across all customer segments and industries


Source: Bank Data

Domestic Loan Book Split By Industry Gross loan book Split By Sector

Sept’12

Sept’13

Large Corporate

15.3%

Mid Corporate

17.8%

SME 15.7%

Agri 11.4%

Retail 20.1%

International 16.7%

Other 3.1%

|

Agri. Loans (INR bn) Home Loans (INR bn) Auto Loans (INR bn)

16


1. Source: All Scheduled Commercial Banks (ASCB) data as per RBI Bulletin as of September 30, 2013

1,087

1,988

FY11 H1 FY14

27.3%

1,576

2,198

FY11 H1 FY14

14.2%

1,197

1,579

FY11 H1 FY14

11.7%

899

1,300

FY11 H1 FY14

15.9%

948

1,115

FY11 H1 FY14

6.7%

151

274

FY11 H1 FY14

26.8%

CAGR (FY11-H1FY14) Market Share 1

25.7% 23.1%

Mid Corporate (INR bn) Large corporate (INR bn) SME (INR bn)

Well Diversified Loan Portfolio Amongst Very Few Banks Which Straddle All Segments of the Economy

3

19.9%

|

3.3%

4.4% 4.8%

5.6%

1.6% 1.8% 2.1%

2.9%


17

▪ Stronger follow up of impaired assets & enabling administrative structure put in place

▪ Account by account solution for resolution

▪ Early Warning Signals – Capturing internal triggers and external events in the ecosystem

(RFP rolled out)

▪ IT driven products for Agri KCC2 – Continuous farmer interactions

▪ Focus on investment grade corporates for incremental exposure


Non Performing Asset (NPA) Levels

4


1. AUCA - advances under collection account

2. KCC – Kisan Credit Card

65.0% 68.1% 66.6% 60.2%

Net NPA Gross NPA PCR Ratio (incl. AUCA)1

253.3

396.8

511.9

642.1

123.5 158.2

219.6

321.5


NPA % NPA (Rs Bn)

| 18


Sep - 2013

4


INR bn Total Large

Corp. Mid. Corp SME Agri Retail Intl. Total

Cash Recovery 14.0 0.3 0.7 5.4 5.0 2.3 0.6 14.1

Up-gradation 15.2 - 11.4 4.6 3.1 3.8 0.9 23.8

Write off 11.5 2.9 4.5 2.1 0.0 2.7 0.3 12.5

Gross Reduction 40.6 3.2 16.6 12.1 8.1 8.8 1.8 50.5

Fresh Slippages 137.7 7.5 48.0 11.6 6.8 1.4 8.4 83.7

Net Increase 97.0 4.3 31.4 (0.4) (1.3) (7.4) 6.7 33.2

Gross NPA % 5.6% 1.7% 10.2% 9.1% 11.1% 1.8% 2.1% 5.6%

Q2FY14 has witnessed a 39% reduction in fresh slippages as compared to Q1FY14 driven by SME, Agri and

Retail segments

Significant improvement in upgradations

Slippages (as a % of opening Gross Advances) have reduced to 0.8% in Q2FY14 from 1.3% in Q1FY14

Jun - 2013

| 19

Particulars Standard NPA Total

Restructured Accounts as on July 1, 2013 (Opening position) 329.6 118.5 448.1

Add:

Fresh Restructuring + Increase in outstanding during Q2 FY14 85.9 7.2 93.1

Add:

Up-gradation to restructured standard category 0.9 (0.9) 0.0

Less:

Restructured Standard Advances which cease to attract higher provisioning and/

or additional risk weight at the end of the quarter and hence need not be shown

as restructured standard advances at the beginning of the next quarter

(2.7) 0.0 (2.7)

Less:

Down-gradations of restructured accounts during Q2 FY14 (19.0) 19.0 0.0

Less:

Write-offs + Closures + Decrease in outstanding (3.2) (10.9) (14.1)

Total restructured accounts as on Sept 30, 2013 (Closing Position) 391.6 132.8 524.4

INR billion

Details of Restructured Assets

Focus on Asset Quality 4

| 20

5 Strong and Improving Capital Levels

▪ RBI’s Basel III guidelines mandate 5.5% Core Equity Tier 1 capital against 4.5% recommended by the Basel

committee

▪ Tier I Capital significantly Core Equity (98%)

▪ Regular infusions by Government of India (GoI)

▪ The SBI Act currently prescribes a minimum Government of India shareholding of 51%

▪ SBI has received infusion of ~INR 20 bn from the GoI on January 2, 2014

▪ Strong internal cash generation through retained earnings

Healthy Capital Position in a Conservative Regulatory Regime

7.77%

9.79% 9.49% 8.73% 9.13%

4.21%

4.07% 3.43%

2.96% 2.96%

FY11 FY12 FY13 H1 FY14 H1 FY14 adj.

Tier I Tier II

1

Basel II Basel III

11.98%

13.86% 12.92%

11.69% 12.09%

Historical Movement in CAR Shareholders have approved capital

raise of

• INR 20 bn through allotment on a

preferential basis to GoI (the

infusion has happened since), and

• upto INR 115 bn 2 or such amounts

as will dilute the GoI

shareholding to 58% through a

QIP or other means


1. Adjusted to include retained profit

2. Subject to Government of India Approval

1

|

20,084 22,141

27,175

32,777


1.0

3.7

6.2

7.7


13,542

14,097

14,816 15,143


Domestic branch network ATM network Internet banking users (millions)

Mobile banking users (million) % of alternate channels / total transactions

4.6%

CAGR (through to FY13)

21

16.3%

6.3

9.0

13.0

15.4


43.6%

149.0%


6 Strong Technology Platform Driving Distribution & New Initiatives

27.7%

33.3% 35.7%

33.3%


Augmentation in Distribution Capabilities

▪ Amongst the largest Core Banking platforms catering to 411 million accounts as of Nov 2013 (up 19.1% y-o-y)

▪ Average transactions per day have increased 15.2% y-o-y to 47.0 mm and peak transactions have increased 38.0% to 76.4 mm in Nov 2013

▪ Peak transactions per second have increased 30.0% y-o-y to 2,472 in Nov 2013

▪ Digital apps revolutionizing the way of doing banking in India

|

Merchant Acquiring Business (MAB) Debit Cards

CAGR (through to FY13)

22

1. Data for standalone entity

6 Strong Technology Platform Driving Distribution & New Initiatives

▪ Business has gained significant scale in last 2 years

▪ Transactions in value terms up 12x from INR 2.1 bn

to INR 24.8 bn in FY13

▪ Revenue from merchant business up 296% yoy to

INR 331.5 mm in FY13

▪ POS terminals up by 59.7% from 65,514 as of March

2013 to 104,615 as of Sept 2013

▪ Strategy to boost number of current accounts and

CASA balances

0.3 1.0

9.0

10.9


Point of sale transactions 1 (million)

447.7%

▪ SBI Group ranks #1 in terms of market share of

total number of debit cards (44% as of March 2013)

and market share of spends (23.1% as of March

2013)

▪ SBI has taken several initiatives to increase

activation and spends

▪ Tied up with major online travel portals

▪ Launched ‘e-commerce’ marketplace in co-

ordination with Mastercard

Multiple Alternate Growth Avenues

72.8

91.0

110.4 123.9


Debit Cards 1 (million)

23.1%

#1

| 23

Green Channel Counter Green Remit Card Cash Deposit Machines

▪ Introduced in January 2012

▪ Paperless remittance product for

non a/c holders to send money to

beneficiary account

▪ 3.1 million cards issued in two

years of which 2.5mm issued in

current financial year 1

▪ Customer transacts himself

▪ Faster and efficient

▪ Facility presently available across

10,091 branches. Will be extended

to other centres

▪ Units / Corporates transact

themselves

▪ Get instant acknowledgement for

cash deposit

▪ Customer convenient timings

e-Auction e- Freight Other e-Products

▪ Sole franchisee

▪ Facility of online payment of

Railway freight

▪ Product backed with a Bank

Guarantee

▪ 679 Corporate Clients on the book

as on Nov 13 and growing

▪ Product for Government and PSUs

▪ Process to optimize the price of

goods to be auctioned

▪ Real time open and transparent

environment

▪ Cyber Treasury

▪ e-Tax

▪ e-Tendering

▪ Self Service Kiosk

▪ i-collect

6 Strong Technology Platform Driving Distribution & New Initiatives Green Initiatives – Paperless Interaction

1. Bank Data: April to Nov 2013

|

20,763

29,866

38,480 38,018


6

9

16

24


6,599

12,931

20,531

27,959


21

54

130

101


24


Source: Bank Data

7 Well Positioned to Reap Benefits of GoI’s Financial Inclusion

Initiatives

5,138

5,382

5,686 5,759


5.2%

Unbanked villages covered Rural branches BC Channel transactions

(INR billion)

No. of BC Outlets Number of A/c’s through BC Channel

(million) ▪ Integral role in implementing the Indian

Government’s initiatives in relation to

financial inclusion

▪ 40% of the branches opened in

H1FY14 are RUSU branches

▪ F.I. debit card launched in Jan

2013 – 1.48 mm cards issued to

date – thereby helping the

development of RuPay platform

▪ SBI is the sole sponsoring bank for

Direct Benefit Transfer (DBTL)

transactions

76.4% 148.7%

70.1%

36.1%

CAGR (FY11-FY13)

Investment for Future

| 25

8 Growth Beyond Banking

18.6%

14.2%

12.6%

9.1% 8.0%

6.9%

5.3%

3.5% 3.0% 2.9%

ICIC

I P

ru

HD

FC

S

tandard

Life

SB

I Life

Baja

j A

llia

nz

Birla

Sun L

ife

Max L

ife

Relia

nce L

ife

Kota

k O

ld

Mutu

al

Aviv

a

PN

B M

etL

ife

SBI Life is a 74:26 JV between SBI and BNP Paribas Cardiff

Market Share (Private Players) 1

12.7% 11.7%

10.5% 9.5%

8.6%

7.3%

5.5% 4.9%

4.3% 3.7%

HD

FC

Relia

nce

ICIC

I P

ru

Birla

Sun L

ife

UT

I

SB

I M

utu

al

Fu

nd

Fra

nklin

T

em

ple

ton

IDF

C

Kota

k

Mahin

dra

DS

P B

R

6th largest Fund House with over 5 million investors

Market Share (as Average AUMs) 2

Private Equity Investment Banking

Leadership position in Life Insurance and Asset Management coupled with significant presence in other financial

services including Investment Banking, General Insurance etc. which have helped transform SBI into a strong

financial services conglomerate

General Insurance

SBI Macquarie Infrastructure - JV

with Macquarie Infrastructure &

Real Assets and IFC (SBI stake -

45%)

India-Oman Joint Investment Fund –

JV with State General Reserve Fund

(SBI stake - 50%)

SBI Capital Markets is

one of India’s leading

domestic investment

bank

74% JV with IAG

Australia

#3 in Personal

Accident Insurance 4

Life Insurance Mutual Fund

SOURCE:

1. Insurance Regulatory and Development Authority. Note: New Business APE Basis – FY13

2. The Association of Mutual Funds in India. Note: July to September 2013

3. Market share based on total market size as per RBIs ‘Trends and Progresses in Banking’ reports dated March 2013

4. Insurance Regulatory and Development Authority - September 2013 Non Life Segment wise data

SBI Cards

Zero Net NPAs

PAT of Rs. 1,430mm in H1FY14

Market share in terms of number of

cards increased from 12.4% in FY12

to 13.3% in FY13 3

| 26

Highly Qualified and Experienced Management

Acclaimed with prestigious industry awards

9

Focused towards sustainable and safe growth

Mrs. Arundhati Bhattacharya

CHAIRMAN

DMD & GE

(MC) DMD & GE

(SAM)

DMD & GE

(Global Markets) DMD & CFO DMD & CDO DMD & CIO DMD & CCRO

DMD

(I & MA)

DMD

(CS & NB)

CGM (IB) DMD

(Operations)

14 Circle

CGMs

DMD

(Retail Strategy)

Associate Banks

and Subsidiaries

Mr. A. Krishna Kumar

Managing Director &

Group Executive

(National Banking)

Mr. Hemant G. Contractor

Managing Director &

Group Executive

(International Banking)

Mr. S. Vishvanathan

Managing Director &

Group Executive

(Associate & subsidiaries)

Mr. P. Pradeep Kumar

Managing Director &

Group Executive

(Corporate Banking)

Chief Vigilance Officer

Best Bank in “Electronic

Payments Systems”,

“Use of Technology for

Financial Inclusion” and

“Customer Management &

Business Intelligence”

HRMS Project wins “Silver

Edge Award ”

Winner in the “Ethical

Company Banking” sector at

India’s Most Ethical

Companies Awards

Winner of “Best Green

Service Innovation” award

Bagged “Asia's Best CSR

Practices Awards”

Awarded “Golden Peacock

Award For HR Excellence”

1. Awards for the year 2013

| 27

Strategy for SBI

|

Vision

Strategy for a

safe and

profitable

growth

▪ Strengthening distribution network and alternate channels

▪ Value added and technology driven products for retail customers - Targeting youth through

contemporary products

▪ Focus on investment grade corporates leveraging low cost of funds

▪ Enhancing fee income by up selling & cross selling and increasing customer wallet share

▪ Renewed focus on improving margins & productivity and cutting costs

▪ Greater synergies with subsidiaries

28

Strategy for SBI

▪ My SBI

▪ My Customer first

▪ My SBI: First in customer satisfaction

| 29

Strategy for SBI Key New Initiatives

Enhancing

Technology from

Transactions to

Platform

▪ Moving beyond CBS to integrate several operating platforms

▪ Enterprise Data Ware House – Data Mining/CRM/Customer one view/Business Analytics

▪ Move to applications – Digital apps being developed for rollout in near future

Risk Culture

▪ Understanding risk, mitigating it well and pricing it correctly

▪ Focus on investment grade corporates for incremental exposure

▪ Revamped organization structure - Delineating operational responsibilities and growth strategies

▪ Early Warning Signals – Capturing internal triggers and external events in the ecosystem (RFP rolled out)

▪ Resolution exercise gets increased focus - centralized follow up of all stressed assets of more than INR 1.0 mn,

account by account strategy for larger accounts and mass campaigns for smaller accounts – Building a robust

credit culture

Increased Cost

Consciousness

▪ Creating a culture of cost control – paperless office, travel, using in-house facilities, energy efficiency etc

▪ Optimizing the balance between people, processes & technology

▪ Redeployment of staff from administrative offices to customer facing units

▪ Implementation of Automated Compliance Management System

Collaborative

Human Resources

Practices

▪ Internal social networking site “ SBI Aspirations” launched across the Bank

▪ Empowering staff to work smarter, more efficiently and collaboratively

▪ Focus on significant improvement in service quality

▪ Skill development & E learning platform – Mandatory e-modules for front line staff

▪ Talent Management

▪ Revamped performance appraisal system

▪ A broad based, transparent, performance based incentive scheme on the anvil

| 30

Key Financials

| 31

SOURCE:

1. Return on average equity is the ratio of the net profit after tax to the quarterly average net worth (capital plus reserves).

2. Return on average assets is the ratio of the net profit after tax to the quarterly average assets.

FY10 FY11 FY12 9M FY13

Income Statement

Interest earned 13.0 14.9 19.4 16.2

Interest expended 8.6 8.9 11.5 10.2

Net Interest Income 4.3 5.9 7.9 6.0

Other income 2.7 2.9 2.6 1.9

Operating Income 7.0 8.8 10.5 7.9

Operating Expenses 3.7 4.2 4.8 3.7

Operating profit 3.3 4.6 5.8 4.2

Net profit 1.7 1.5 2.1 2.0

Key Ratios

NIM (%) 2.66% 3.32% 3.85% 3.40%

Cost to income (%) 52.59 47.60 45.23 46.68

Other income to operating income ratio (%) 38.74 32.73 24.90 23.98

Gross NPA (%) 3.05 3.28 4.44 5.30

Net NPA (%) 1.72 1.63 1.82 2.59

Provision cover (%) 59.23 64.95 68.10 61.49

ROAE (%) 14.04 12.84 14.36 15.61

ROAA (%) 0.88 0.71 0.88 0.95


Income Statement

Interest Earned 813.9 1,065.2 1,196.6 656.4

Interest Expended 488.7 632.3 753.3 418.8


Other Income 158.2 143.5 160.3 77.5


Employee Cost 152.1 169.7 183.8 113.6

Other Operating Expenses 78.0 90.9 109.0 62.9

Operating Profit 253.4 315.7 310.8 138.6

Net Profit 82.7 117.1 141.1 56.2

Key Ratios

NIM (%) 3.32% 3.85% 3.34% 3.19%

Cost to Income (%) 47.6% 45.2% 48.5% 56.0%

Employee Cost to Income (%) 31.5% 29.4% 30.4% 36.0%

Other Operating Expenses to Income (%) 16.1% 15.8% 18.1% 20.0%

Gross NPA (%) 3.3% 4.4% 4.8% 5.6%

Net NPA (%) 1.6% 1.8% 2.1% 2.9%

ROA (%) 0.7% 0.9% 0.9% 0.7%

ROE (%) 12.8% 16.1% 15.9% 11.8%

Profit & Loss Summary and Key Operational Highlights (INR bn)

SBI Standalone Financials

|

Balance Sheet Summary (INR bn)

SBI Standalone Financials (Cont’d)

32

FY10 FY11 FY12 9M FY13

Balance Sheet

Cash and balance with RBI 11.2 17.2 9.8 9.4

Balances with banks and money at call and short notice 4.5 5.2 7.9 5.4

Investments 54.0 54.0 57.0 65.7

Advances 115.4 138.1 158.4 178.6

Fixed assets 0.8 0.9 1.0 1.2

Other assets 6.4 8.0 9.7 7.8

Total assets 192.3 223.4 243.8 268.1

Capital 0.1 0.1 0.1 0.1

Reserves and surplus 11.9 11.8 15.2 17.5

Deposits 146.8 170.5 190.5 211.1

Borrowings 18.8 21.8 23.2 27.1

Other liabilities and provisions 14.7 19.2 14.8 12.3

Total liabilites 192.3 223.4 243.8 268.1


Balance Sheet

Cash and Balance with RBI 944.0 540.8 658.3 624.9

Balances with Banks & Money at Call & Short Notice 284.8 430.9 489.9 515.3

Investments 2,956.0 3,122.0 3,509.3 3,985.4

Advances 7,567.2 8,675.8 10,456.2 11,030.9

Fixed Assets 47.6 54.7 70.1 75.5

Other Assets 437.8 531.1 478.9 526.4

Total Assets 12,237.4 13,355.2 15,662.6 16,758.3

Capital 6.3 6.7 6.8 6.8

Reserves and Surplus 643.5 832.8 982.0 1,074.5

Deposits 9,339.3 10,436.5 12,027.4 12,924.6

Borrowings 1,195.7 1,270.1 1,691.8 1,889.4

Other Liabilities and Provisions 1,052.5 809.2 954.6 863.0

Total Liabilities 12,237.4 13,355.2 15,662.6 16,758.3

|

SBI Consolidated Financials

33


Income Statement (Consolidated)

Interest Earned 1,136.4 1,472.0 1,679.8 912.6

Interest Expended 680.9 893.2 1,068.2 585.1


Other Income 342.1 296.9 325.8 143.7


Employee Cost 207.1 220.8 244.0 149.3

Other Operating Expenses 258.1 247.8 284.2 132.3

Operating Profit 332.4 407.1 409.2 189.5

Net Profit 106.8 153.4 179.2 73.7

FY10 FY11 FY12

Income Statement

Interest earned 18.3 20.7 26.9

Interest expended 12.2 12.4 16.3

Net Interest Income 6.1 8.3 10.6

Other income 6.2 6.2 5.4

Operating Income 12.3 14.6 16.0

Operating Expenses 7.7 8.5 8.6

Operating profit 4.5 6.1 7.5

Net profit- group 2.2 2.0 2.9

Profit & Loss Summary (INR bn)

|

SBI Consolidated Financials (Cont’d)

34


Balance Sheet

Cash and Balance with RBI 1,193.5 792.0 895.7 817.5

Balances with Banks and Money at Call and Short Notice 359.8 483.9 556.5 626.5

Investments 4,190.7 4,609.5 5,193.9 5,761.8

Advances 10,064.0 11,636.7 13,926.1 14,548.0

Fixed Assets 64.9 74.1 93.7 100.6

Other Assets 606.2 703.4 665.6 742.4

Total Assets 16,479.0 18,299.6 21,331.6 22,596.9

Capital 6.3 6.7 6.8 6.8

Reserves and Surplus 828.4 1,055.6 1,243.5 1,357.5

Minority Interest 29.8 37.3 42.5 47.9

Deposits 12,555.6 14,146.9 16,274.0 17,314.1

Borrowings 1,424.7 1,579.9 2,037.2 2,272.2

Other Liabilities and Provisions 1,634.2 1,473.2 1,727.5 1,598.4

Total Liabilities 16,479.0 18,299.6 21,331.6 22,596.9

FY10 FY11 FY12

Balance Sheet

Cash and balance with RBI 15.0 21.8 14.5

Balances with banks and money at call and short notice 5.5 6.5 8.9

Investments 75.3 76.5 84.1

Advances 158.7 183.7 212.4

Fixed assets 1.1 1.2 1.4

Other assets 9.1 11.1 12.8

Total assets 264.7 300.8 334.1

Capital 0.1 0.1 0.1

Reserves and surplus 15.1 15.1 19.3

Minority interest 0.5 0.6 0.7

Deposits 203.8 229.2 258.2

Borrowings 22.3 26.0 28.9

Other liabilities and provisions 22.9 29.8 26.9

Total liabilities 264.7 300.8 334.1

Balance Sheet Summary (INR bn)

| 35

Annexure

| 36

Banking Sector Landscape

SOURCE: Reserve Bank of India as of March 31, 2013

NOTE: Totals exclude regional rural banks

SBI Group 23.1%

PSU Bank 2 6.5%

PSU Bank 3 4.8%

Other Nationalized

Banks 47.8%

Pvt. Sector Banks 17.4%

Foreign Banks 0.4%

Number of Branches Advances (INR bn)

SBI Group 23.5%

PSU Bank 2 5.6%

PSU Bank 3 5.3% Other

Nationalized Banks 41.8%

Pvt. Sector Banks 19.4%

Foreign Banks 4.5%

SBI Group 21.8%

PSU Bank 2 6.4%

PSU Bank 3 5.3%

Other Nationalized

Banks 43.9%

Private Sector Banks

18.8%

Foreign Banks 3.9%

Deposits (INR bn)

Total: 92,114 Total: 58,797

Total: 74,295

Landscape 2013 # Banks

SBI Group 6

Other Nationalized Banks 20

Old Private Sector Banks 13

New Private Sector Banks 7

Foreign Banks 41

Total 87

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