India’s largest bank is paying out a dividend for the first time in four years
- The State Bank of India (SBI) is paying out a dividend to its shareholders for the first time in four years at ₹4 per share.
- The last time the national bank announced a payout was in 2017, when it announced a dividend of ₹2.6 per share.
- This year’s dividend will be paid out to shareholders on 18 June 2021.
The dividend will be paid out to shareholders on 18 June 2021.
The announcement comes alongside the national bank’s net profit jumping 81% compared to last year hitting ₹6,451 crore for the three months ending 31 March 2021. SBI reportedly received a windfall of nearly ₹4,000 crore from the bankrupt Bhushan Power and Steel, clearing up its dues.
AdvertisementDespite the second wave of COVID-19 adding stress to the economy, SBI’s shares are up by 40% so far, this year. After the announcement of its strong results, the stock has jumped more than 4% as of 3:00 p.m on March 21.
Meanwhile, SBI’s net interest income grew by 18.9% year-on-year (YoY) and loans increased by 5% during the same period.
Provisions and contingencies are at ₹14,884 crore, which included provisions for loss from loans. This 10.98% lower than last year, but 9.17% higher as compared to last quarter.
Profit for public sector banks is also good news for employees
Most Indian banks who have declared their results so far, including SBI, Canara Bank, and Punjab National Bank, have been in the green. Not only is this good news for shareholders, but it's also good news for the banks’ employees.
Under the 11th bipartite agreement to revise salaries last year, performance-linked-incentive (PLI) was also introduced. It is paid to employees based on the annual performance of a bank. The bigger the jump in profit, the bigger the PLI paid out to employees.
|Growth||Status of PLI|
|Less than 5%||No PLI|
|5-10%||5 days’ salary|
|10-15%||10 days’ salary|
|More than 15%||15 days’ salary|
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