State Bank of India Chairman Dinesh Kumar Khara retired on Wednesday, passing on the baton with an ambitious profit goal of Rs 1 trillion for FY25 to his successor, CS Setty. Khara’s tenure has been marked by extraordinary financial performance, with SBI’s profit surging significantly, delivering a 325 per cent return to investors, reported The Economic Times.
Taking over as SBI Chairman on October 7, 2020, amidst the Covid-19 pandemic, Khara has overseen a remarkable transformation. Under his leadership, SBI’s annual profit skyrocketed from Rs 20,410 crore in FY21 to Rs 61,077 crore in FY24, a 200 per cent increase. This impressive achievement earned him the moniker ‘profit king’.
Khara’s term saw SBI’s cumulative profit reach Rs 1.63 trillion over the past four years, surpassing the Rs 1.45 trillion accumulated over the previous 64 years. Notably, the bank’s net non-performing assets (NPAs) plummeted from 1.59 per cent in Q1FY21 to just 0.57 per cent in Q1FY25.
Deposits grew by over 41 per cent, reaching Rs 49,01,726 crore, while the loan book expanded by 60 per cent to Rs 38,12,087 crore. Khara also highlighted a six-fold increase in profit per employee to Rs 30 lakh, reflecting improved productivity during his leadership.
Despite these achievements, Khara expressed dissatisfaction with SBI’s market valuation, suggesting that the bank is still undervalued compared to peers. SBI’s stock, which has surged 325 per cent from Rs 191.6 to Rs 815 under Khara’s stewardship, continues to attract positive sentiment from investors.
SBI, now India’s seventh-largest listed company with a market capitalisation of around Rs 7.3 trillion, was the second-largest profit-maker in FY24, behind Reliance Industries. The bank’s strong deposit base and robust growth prospects in SME, retail, and corporate sectors have cemented its position as a top pick on Dalal Street. Analysts, including ICICI Securities, expect a smooth transition as Khara’s successor steps into the role, with the potential for further capital raising to support loan growth.
In 2024 alone, SBI has outperformed benchmarks with a 27 per cent return, reflecting continued confidence in the bank’s prospects.
First Published: Aug 28 2024 | 1:00 PM IST
