State Bank of India Retains 14-15% Loan Growth Guidance
SBI expects broad-based credit growth and aims to mobilise $10 billion in foreign-currency deposits.
Quick Look
State Bank of India expects broad-based credit growth, retaining its 14-15% loan growth guidance and targeting $10 billion in foreign-currency deposits following strong Q1 profit results.
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Why It Matters
State Bank of India is the country's largest lender by assets, releasing quarterly performance data for the period ended June 30.
State Bank of India expects credit growth to remain broad-based across major business segments and has retained its loan growth guidance of 14-15% for the current financial year, an SBI executive said on Friday.
The country's largest lender by assets also expects to mobilise around $10 billion in subsidised foreign-currency deposits, after raising about $6 billion through the deposits so far.
"Credit growth remained broad based across all major business segments," the executive said during a post-results interaction.
SBI has so far mobilised $6 billion in subsidised foreign-currency deposits, with the traction indicating that the bank could raise around $10 billion, the executive said. The lender does not intend to change the interest rate on these deposits at this juncture, the executive added.
SBI has also retained its net interest margin guidance at 3% for the financial year.
"We are sticking to net interest margin guidance of 3%," the executive said.
On asset quality, the lender said it was not currently concerned about any potential impact from El Nino conditions.
"El Nino impact is not yet seen as a concern to asset quality," the executive said.
The bank also remains focused on improving operating efficiency and aims to keep its cost-to-income ratio below 50%.
SBI's comments came after it reported a better-than-expected performance for the quarter ended June 30. Net profit rose 10.2% year-on-year to Rs 21,121 crore, compared with analysts' estimate of Rs 19,102 crore, according to LSEG data.
Gross loan growth stood at 18.63% during the quarter, with corporate credit rising 18.05% and retail personal loans increasing 15.15%. Deposits grew 9.73% from a year earlier.
Net interest income rose nearly 15% to Rs 46,992 crore, while domestic net interest margin expanded 7 basis points from the previous quarter to 3%.
Asset quality also improved marginally, with gross non-performing assets at 1.47% of total loans, compared with 1.49% three months earlier.
What to Watch
AI outlook — possibilities, not facts
SBI to mobilise around $10 billion in foreign-currency deposits
Likely · Within months
Open Questions
- Will external economic pressures alter the 14-15% loan growth target?
- How will El Nino conditions affect rural credit sectors in upcoming quarters?
