SBI to open 400 branches in FY25 across India
State Bank of India (SBI), the nation's largest lender, plans to open 400 new branches across the country in the current fiscal year. This move is part of SBI's network expansion strategy, following the opening of 137 branches, including 59 rural ones, in the previous fiscal year. Amid the high prevalence of digital transactions, SBI Chairman Dinesh Kumar Khara affirmed that physical branches remain relevant for offering certain services such as advisory and wealth services.
Highlighting importance of physical branches
Despite 89% of digital and 98% of transactions occurring outside the branch, Khara insists on the necessity of physical branches. He stated to PTI that new areas are emerging where branches are still required. According to him, services like advisory and wealth services can only be offered from a branch. The bank plans to identify locations with opportunities for these services as part of its expansion plan. As of March 2024, SBI has a network of 22,542 branches across India.
Strategy for monetizing subsidiaries
Khara revealed that SBI plans to scale up operations of its subsidiaries before listing them on the capital market, aiming to increase valuation and ensure better returns for the parent bank. He mentioned that SBI General Insurance and possibly SBI Payment Services could be eligible for this route in the future. However, he clarified that there are no such plans at present.
Infusing capital into SBI General Insurance
In the last fiscal year, SBI invested an additional ₹489.67 crore into its subsidiary, SBI General Insurance, and alloted Employee Stock Ownership Plan (ESOP) to employees. This resulted in a slight decrease in the bank's stake from 69.95% to 69.11%. SBI General Insurance reported a significant rise of 30.4% in net profit to ₹240 crore for the financial year ending March 2024.
SBI Payment Services reports decline in net profit
SBI Payment Services, another subsidiary of SBI, is 74% owned by the bank, with the remaining stake held by Hitachi Payment Services. Despite being one of the largest acquirers in India with over 33.10 lakh merchant payment acceptance touchpoints as of March 2024, the company reported a decrease in net profit to ₹144.36 crore for FY24 from ₹159.34 crore in the previous year.
