The largest lender State Bank of India (SBI), which has finished two quarters since its consolidation, witnessed a massive layoff in the staff strength. The SBI has added 6,847 branches taking its overall headcount up to 23,423 branches as on June 2017.
 
SBI has consolidated with its five associate banks and Bharatiya Mahila Bank from April 01, 2017. These five associate banks are - State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore.

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Within first half of FY18 (1HFY18), SBI has laid off about 10,584 employees post -merger. The staff strength has come down to 2,69,219 staff as on September 2017 compared to 2,79,803 as on March 2017. 

Interestingly, SBI’s former chairperson Arundhati Bhattacharya had also made it clear, before consolidation, that SBI may relocate some branches of its associate banks but none of them will be shut down to assuage the staff. 

Also, Bhattacharya on April 03, 2017 said, "No employee of the associate banks or BMB would be asked to leave," adding that "Branches will also not be eliminated after the merger."

The SBI, however, laid off 6,622 employees in Q1FY18 followed by another 3,962 employees in Q2FY18. 

This is a heavy layoff compared to removal of just 3,197 employees recorded during the entire fiscal of 2015-16 (FY16). 

Earlier there were reports stating that SBI is looking to redeploy staff in government services branches as the centre is shifting most of its banking operations towards digitization. 

It may be noted that  a total of 11,382 employees have taken retirement plan between April  - September 2017.

With this SBI's staff expense decelerated to Rs 7,703 crore in Q2FY18 - from Rs 7,724 crore in the preceding quarter and Rs 8,300 crore in the corresponding period of the previous. 

Apart from it, Q2FY18 turned out to be good quarter for SBI. 

Slippage Ratio declined from 5.38% in Q1FY18 to 1.85% in Q2FY18, significantly improved across all segments. Also gross NPA Ratio tumbled from 9.97% in Q1FY18 to 9.83% in Q2FY18 with net NPA decreasing from 5.97% in Q1FY18 to 5.43% in Q2FY18. 

The watch-list declined 13% QoQ to Rs 21,300 crore; while healthy provisions (enabled by SBI Life stake sale gains) helped improve coverage ratio by 470 basis points on QoQ basis.

Thus SBI's consolidated profit rose to Rs 1,840.4 crore from Rs 20.7 crore a year ago. However standalone profit of the bank dropped 38% to Rs 1,582 crore in the July to September quarter.

Analysts at Motilal Oswal said, "We see the NPL cycle turning for SBIN, and expect the bank to reduce its net NPA to 3.1% by FY19E. SBIN is well capitalized, with a Tier-1 of 11%, which will enable it to utilize the capital infusion from the government for cleansing its books and thus report a prompt recovery."

On Monday, the share price of SBI closed on a negative note at Rs 331.20 per down gradually down by 0.60% on BSE. However, the stock did grow over 3% in the entire day of tradings.