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

Salaries and other benefits of the employees of state-owned banks along with some of the oldest foreign banks like Standard Chartered Bank and HSBC, and old-generation private sector lenders like HDFC, ICICI, Federal Bank, among others, are decided by the industry lobby IBA under a wage settlement that has a five-year tenure.

State Bank of India, which saw a sharp 35 per cent fall in its December quarter net profit due to a one-time expenditure towards increased salaries and pensions, said the burden will jump to around ₹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 ₹9,164 crore during October-December 2023 compared to ₹14,205 crore profit recorded in the corresponding period a year ago and ₹14,330 crore earned in the preceding quarter

The public sector lender attributed the fall in profit to the additional provision of ₹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.