SBI had reported a 34 per cent fall in net profit for the quarter ended December 2013, at Rs 2,234 crore (Rs 22.34 billion) -- a fourth straight quarter of year-on-year profit decline -- as mounting bad loans forced it to make higher provisioning.
One-off items such as employee wages and benefits had also put pressure on its bottom line in the quarter.
To return to a path of profitability, it has prepared a seven-point list on which action is to be taken over a year.
This year’s schedule has also been segregated into four sub-time frames, for specific purposes.
Containing slippages, cost control, boosting other income stream and improving employee productivity are four areas where focus will be more.
Improving of customer satisfaction, risk management and human resources are the other areas to be emphasised.
“All goals have been subdivided into various time buckets -- the next 40 days, three months, six months and one year.
“The exact targets for each time bucket have not yet been firmed up. The exercise is in hand,” a top official said.
One area where SBI is comfortable is capital adequacy.
Having raised a little over Rs 10,000 crore (Rs 100 billion) in equity from the government and institutional investors, it has an adequate capital base for the next 18-24 months.
To begin, a 40-day plan has been finalised, aimed at improving the performance in the current quarter, January-March.
"The aim is to show a better performance in the fourth quarter (January-March 2014), which would be a basis for long-term uptick in the overall credit and financial profile.
“It will go beyond the numbers, to make the organisation robust and motivate employees,” an official said.
At the top of the order in the seven-point agenda is a control on bad loans.
Slippages, about Rs 11,000 crore (Rs 110 billion) in the third quarter, have hit the financial profile in terms of both provisioning and interest earnings.
“It is not that the bank has been silent on this count.
“It has been active in monitoring loan accounts and recoveries.
Now, the scale of (this) activity will be big and become more effective,” said another executive.
A two pronged-strategy is being put in place to arrest the fall in asset quality.
One is to detect early signs of stress, to ensure resolution before the 90-day repayment
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