Wednesday, August 16, 2017

SBI reduces its staff headcount by 6622; Q1 net profit declines by 22%

COUNTRY's biggest lender State Bank of India (SBI) reduced its staff headcount by 6,622 in the first quarter of FY18 to 2.73 lakh from 2.80 lakh at the beginning of the quarter due to retirements and a voluntary retirement scheme. SBI now plans to redeploy over 10,000 employees following the merger of its associate banks and due to digitisation.
Consolidation of associate banks...
and a shift to digital channels for banking have set in motion a job restructuring process in one of the largest employers in the country. "While the physics of the merger is over, the chemistry is yet to be completed," said Arundhati Bhattacharya, chairman, SBI, referring to the integration process after the merger of balance sheet which came into effect from the first quarter.
A large part of the job restructuring is happening on account of merger as the bank changes its branch network to avoid having several outlets on the same street. SBI has merged 594 branches till August 6 and has rationalised 122 administrative offices. This will result in savings of over Rs 1,160 crore annually. The bank has entrusted a new entity—SBI Infra Management—the responsibility of managing its real estate assets.
In the first quarter of the current fiscal, SBI saw 7,247 employees exiting post retirements, including 3,569 employees of the erstwhile associate banks who were offered a voluntary retirement scheme. The bank had paid out Rs 473 crore ex gratia under this scheme which will result in salary savings of Rs 400 crore per annum. Of the staff redeployment planned by SBI, 2,000 will be because of shifting of administrative offices and another 8,618 due to branch rationalisation. The total employees of SBI and associates as on March 31 was around 2.80 lakh. The number has been stagnant for a couple of years as there has been a hump in retirements of large number of employees hired during the '80s. As against the exits, the bank has hired only 625 staff members in the first quarter, taking the total headcount down to 2,73,181.
SBI announced its financial results last week with deteriorating asset quality. However, the lender reported nearly three-fold rise in consolidated net profit with improvement in financial ratios. It reported 20.44 per cent standalone fall in net profit at Rs 2005.53 crore for the quarter ended June 30, 2017. It had reported net profit of Rs 2,520 crore in the corresponding quarter last year. On a consolidated basis, bottomline figures of the lender jumped 190 per cent year-on-year to Rs 3031.88 crore.
Deposits increased from Rs 22,97,426 crore as on June 16 to Rs 26,02,534 crore as on June 17 (up 13.28 per cent YoY). Savings bank deposits jumped from Rs 7,65,537 crore as on June 16 to Rs 9,45,040 crore as on June 17 (23.45 per cent YoY). Current account deposits increased from Rs 1,35,155 crore as on June 16 to Rs 1,68,414 crore as on June 17 (24.61 per cent YoY). CASA deposits increased from Rs 9,00,692 crore as on June 16 to Rs 11,13,455 crore as on June 17. Market share in domestic deposit ..

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