Monday, March 4, 2024

Why did SBI’s profit decline by 35%? The truth came out before the stock was likely to fall.

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Why did SBI’s profit decrease?

There has been a huge decline in the net profit of the country’s largest bank SBI. It has fallen by 35 percent to Rs 9,164 crore in the October-December quarter. Now the bank has revealed the truth about the decline in its profits. In such a situation, the possibility of a fall in the stock price when the stock market opens on Monday may be put to rest.

State Bank of India Chairman Dinesh Kumar Khara says that the bank had to set aside Rs 7,100 crore for an important task in the December quarter. If this had not happened, the profit of the bank would have been Rs 16,264 crore.

Salary and pension expenses increased

State Bank of India says that its expenditure on salary and pension is continuously increasing. By March this year, the provision for expenditure on salary increase will increase to Rs 26,000 crore. In such a situation, the bank had to make a huge lump sum provision of Rs 7,100 crore for salary and pension in the October-December quarter. Due to this, its profit declined by 35 percent to Rs 9,164 crore. If this had not happened then the net profit of the bank would have been Rs 16,264 crore.

Deal made with trade union

Recently, SBI had made a deal with different trade unions of its employees to give higher salary and pension. The bank has to increase the salary of its employees and pensioners by 17%. Keeping this extra burden in mind, the bank has made provision of more amount for salary. The new and increased salary is being given from November 2022.

Dinesh Kumar Khara said that out of Rs 7,100 crore, Rs 5,400 crore is for pension, because there was some problem in the calculation of pensioners of the bank. From the year 2022, some employees of the bank were getting 40 percent of their last salary, while some were getting 50 percent pension. The matter is pending in the Supreme Court. Now the matter has become legally clear. Therefore, it has been decided to tackle it in one go with an allocation of Rs 5,400 crore.

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