SBI says wage hike provisions to reach `26,000 crore by March

State Bank of India, which saw a sharp 35 per cent fall in its December quarter net profit due to a onetime expenditure towards increased salaries and pensions, said the burden will jump to around Rs 26,000 crore by March this year.

The country's largest lender on Saturday reported a steep decline of 35 per cent in its net income at Rs 9,164 crore during October-December 2023 compared to Rs 14,205 crore profit recorded in the corresponding period a year ago and Rs 14,330 crore earned in the preceding quarter.

The public sector lender attributed the fall in profit to the additional provision of Rs 7,100 crore made in the reporting quarter towards salaries and pensions arising out of the 17 per cent wage hike settlement reached with employee unions in November last year. The revises wages are effective from November 2022.

Explaining the impact of the wage hike settlement, chairman Dinesh Kumar Khara said, "Of the Rs 7,100 crore total provisions made in the December quarter, Rs 5,400 crore is towards pensions, because there was some anomalies in the way our pensions were calculated. Since 2022, some of our employees were getting 40 per cent and some were getting 50 per cent of their last drawn salary as pension and the matter has been sub-judice since then.

"Now there is legal clarity, we thought of clearing this at a go with this Rs 5,400 crore allocation. Following the recent court order, we have decided to pay every one of our 1.8 lakh pensioners at 50 per cent. This allocation takes care of the entire backlog till December 2023," he told reporters.