State Bank of India (SBI) Chairman Dinesh Kumar Khara, on Thursday, said that he expects loan growth of 8-10 percent in FY22. According to him, the loan growth trajectory for SBI has been a mixed bag so far. Both October and November were good from an overall credit growth point of view.
He said, "2022 credit growth, we are hoping that we should be somewhere in the range of 8-10 percent."
"In terms of the growth trajectory which we have witnessed in the current year till now, it has been a mixed bag and perhaps starting from the month of October onwards, we did see decent growth. October, November were very decent even in terms of the corporate credit uptick," he added.
Khara also mentioned that the housing sector demand has been strong. He explained that areas such as chemical and chemical-related products, food processing and mining have seen good loan growth as well. He said, "We have seen credit growth in chemical and chemical related products, even food processing, infrastructure, mining, rubber, plastic and other products; textile also has seen an accelerated growth in the month of October 2021."
He is hopeful that retail loan will continue to grow in 2022 as well. As far as corporate credit growth is concerned, he believes it will improve once the uncertainty owing to Omicron clears away a bit.
"Retail has continued to grow all this time. And I hope that it will continue to grow even better as we move into 2022," Khara said.
He noted that the credit-deposit ratio has improved for the bank by 300 bps when compared to September 2021.
On net interest margin (NIM), Khara noted that the number has historically remained stable for SBI in the range of 3.20-3.25 percent.
On NPAs and provision coverage ratio (PCR), he said that SBI is pretty well-placed. He mentioned, “For the industry as a whole also, PCR is now somewhere around 70 percent. We are quite comfortably placed, we are at around 80 percent of PCR. I would say that we don't have a visibility of any major account likely to have any kind of stress."
Khara believes collaborating with fintechs can provide value to customers. "When it comes to fintechs, they offer an excellent solution for a particular problem. So I think as a large lender, we have got the capability to consume the solutions offered by them. So to that extent, we are all collaborating and we are trying to add on the value for the customers," he said.
He expects ‘YONO’ to create significant value for SBI, going ahead. He said, "I feel that we have many more functionality, which we can offer and YONO can actually create significant value for the bank."
Watch the video for the full interview.