SBI begins to look bullish at credit growth
State Bank chief Arundhati Bhattacharya on Tuesday said the nation's largest lender is likely to upwardly revise its credit growth target for the current financial year beyond the budgeted 12 percent.
Mumbai: State Bank chief Arundhati Bhattacharya on Tuesday said the nation's largest lender is likely to upwardly revise its credit growth target for the current financial year beyond the budgeted 12 percent.
"We are already growing at very close to 12 percent. This is the slow quarter. So that being the case, we may revise the credit growth projections sometime in the middle of the year," Bhattacharya told reporters on the sidelines of the annual Fibac here.
"...If the revision comes, it should be upward," she specified, when asked about the direction of the review.
In the June quarter, SBI's advances rose 11.41 percent to Rs 14,63,690 crore from Rs 13,13,735 crore. The bank had set a loan growth target of 12 percent for this fiscal primarily led by retail loans which jumped 23 percent.
It can be noted that banks closed the past fiscal year with credit growth at around 9 per cent which was a near six-decade low as cash-strapped and over-leveraged corporates moved away from bank funds in general and moving to money markets for even working capital loans.
Stating that the review will depend largely on demand for high value project loans, Bhattacharya said, "In the slow season, the fact that we have been able to grow at 12 percent that gives us hope that we'll be able to keep this up."
Unlike the last time when a few things got overlooked resulting in the high non-performing assets, the bank will keep certain aspects in mind while participating in project finance, she said.
"Last time there were a lot of risks that were not covered, we have pointed those out for mitigation. We also want the people to get more equity," she said, adding the bank will also keep an eye on the way bidding for a project happens.
Last week, SBI had said its June quarter net profit fell only 32 percent to Rs 2,521 crore as its credit quality improved and could arrest large slippages.
"The worst is behind us when it comes to stressed assets. But let me warn you that the recovery will be slow and staggered as all those accounts marked in the watch list display stress. But I don't think we will be revising upwards the watch list of Rs 31,000 crore going forward," Bhattacharya told reporters last Friday announcing the first quarter earnings.