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SBI boss flags rising trade disputes, Iran sanctions as key risks in AGM speech

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Operating environment for banks has become more challenging, Kumar said.

SBI boss flags rising trade disputes, Iran sanctions as key risks in AGM speech
SBI chairman Rajnish Kumar on Thursday flagged the rising protectionist policies of the United States and the sanctions on Iran as key risks to global growth in a speech to the bank's shareholders.
Though the global economy experienced broad based growth in 2017, especially in the US and Europe, a series of trade disputes between the US and major world economies has created financial volatility, Kumar said.
The risks of a full-blown global trade war remain real, he added.
The Big Takeaway: Rising trade disputes between major world economies remains a threat to market stability.
  • Operating environment of banks has become more challenging
  • Speeding up of resolution under IBC should improve confidence in the economy
  • After RBI's rate hike, hardening of bond yields is a possibility
  • Financial sector volatility may increase challenges in terms of higher crude prices and trade wars
  • On the bank's targets:
     
    • Bank aims to achieve credit growth of 10-12% by 2020
    • Bank will reorder portfolio to reduce CRWA to total advances ratio
    • Bank will internally reorganise corporate banking sector
    • CAG will focus on high priority and quality individual and Group Relationship Coordinators will be introduced
    • Investments in digital banking will pay rich dividends as issues of asset quality are sorted out
    • On the bank's financial health:
       
      • Retail segment constitutes 57.5% of domestic loan book
      • Home loans grew by 13.26% to Rs 3,13,000 crore in FY18
      • Bank raised Rs 15,000 crore through QIP in FY18 and received Rs 8,800 crore through govt infusion
      • Rs 5,436 crore was raised through disinvestment of 8% stake in SBI Life
      • Gross NPAs increased to Rs 2,23,437 crore and net NPA to Rs 1,10,000 crore
      • Material changes in recognition of stressed assets occured after RBI's February circular
      • Gross NPA ratio was at 10.91% and Net NPA at 5.73% at end of FY18
      • Bank has Rs 77,626 cr of funds tied in accounts before NCLT under resolution
      • Expect bulk of resolutions in NCLT's first list in H1FY19
      • Corpus under treasury department grew by 13.6% in FY18
      • G-sec portfolio increased 22% mainly due to merger of associate banks
      • Bank has increased commercial paper and corporate bond portfolio by 9% in FY18

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        CompanyPriceChange%Gain
        Adani Ports731.05 36.70 5.29
        NTPC118.00 4.45 3.92
        Titan Company1,742.85 31.55 1.84
        SBI419.75 6.85 1.66
        HDFC Life718.75 9.55 1.35
        CompanyPriceChange%Gain
        NTPC117.95 4.40 3.87
        Titan Company1,740.85 31.90 1.87
        SBI419.55 6.75 1.64
        HUL2,516.10 35.35 1.42
        Bajaj Finserv12,161.70 163.70 1.36
        CompanyPriceChange%Gain
        Adani Ports731.05 36.70
        NTPC118.00 4.45
        Titan Company1,742.85 31.55
        SBI419.75 6.85
        HDFC Life718.75 9.55
        CompanyPriceChange%Gain
        NTPC117.95 4.40
        Titan Company1,740.85 31.90
        SBI419.55 6.75
        HUL2,516.10 35.35
        Bajaj Finserv12,161.70 163.70

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