SBI Plans Major Expansion with 400 New Branches in FY25. It is expected that State Bank of India, the country’s largest lender, will dramatically increase its network of branches in the current fiscal by opening 400 additional branches. SBI Chairman Dinesh Kumar Khara announced an ambitious strategy.
Expansion Details
SBI’s network expansion is part of a larger goal to increase its presence, especially in emerging markets. Last fiscal year, the bank established 137 branches, including 59 in rural areas. As of March 2024, SBI has 22,542 branches around the country.
Chairman Khara stressed the importance of physical branches, despite the surge in digital transactions. “Someone asked me if the branch is no longer necessary because 89 percent of digital transactions and 98 percent of transactions take place outside of it. My response is yes. “It is still necessary because newer areas are emerging,” Khara told PTI in an interview. He emphasized that advising and financial services are among the essential offerings that require a physical branch location.
Subsidiaries and Monetisation Plans
Regarding the monetisation of subsidiaries, Khara noted that SBI intends to wait till these businesses’ operations expand further to achieve higher valuations and better returns for the parent company. He specifically cited SBI General Insurance and SBI Payment Services as viable prospects for future listings, though not during the current fiscal year.
“Maybe we’d like to scale them up a bit more, and then we’ll consider going to the stock market to cash in on our investment in these companies. “But not in the current fiscal year,” Khara stated.
In the fiscal year ending March 2024, SBI added ₹489.67 crore to SBI General Insurance Company Ltd. The company’s net profit increased by 30.4 percent to ₹240 crore, from ₹184 crore in the previous year. However, this capital infusion resulted in a tiny fall in SBI’s equity, from 69.95 percent to 69.11 percent.
SBI Payment Services Pvt Ltd, which specializes in merchant purchasing, is another key subsidiary, with SBI owning 74% and Hitachi Payment Services holding the rest. Despite a decrease in net profit to ₹144.36 crore for the year ending March 2024 from ₹159.34 crore the previous year, SBI Payments remains one of the major acquirers in the country, with over 33.10 lakh merchant payment acceptance touchpoints, including 13.67 lakh POS machines.
Conclusion
SBI’s aggressive branch expansion and strategic initiatives for its subsidiaries demonstrate the company’s dedication to growing its market presence and providing value to shareholders. As the bank expands its physical and digital presence, it remains a key player in India’s banking industry.
Source: SBI Plans To Open 400 Branches In FY25 Says Chairman Dinesh Kumar Khara (india.com)
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