📷 Image Credits: Moneycontrol
State Bank of India (SBI) is gearing up for a potential 14-15% credit growth in the fiscal year 2024-25, as revealed by the bank’s chairman Dinesh Kumar Khara. Khara mentioned in an interview with PTI that the growth rate is calculated based on the GDP growth rate plus inflation, with an additional 2-3%, leading to a figure around 14%. This growth projection is contingent on lending opportunities aligning with the bank’s risk appetite.
Furthermore, Khara emphasized the importance of deposits, noting an 11% growth in deposits last year. The bank maintains an excess Statutory Liquidity Ratio (SLR) between Rs 3.5 lakh crore and Rs 4 lakh crore, allowing for lending without pressure on deposit interest rates.
SBI recently raised fixed deposit rates for select short-term maturities by up to 75 basis points, illustrating a focus on deposit growth. The bank aims to at least achieve a 12-13% growth in deposits this year.
Looking ahead, Khara expressed optimism regarding the Net Interest Margin (NIM) outlook for the current financial year, expecting it to remain consistent with the previous year’s levels. Despite challenges such as liquidity costs and macroeconomic conditions, SBI is committed to managing Non-Performing Assets (NPAs) and credit costs.
The successful reduction in Gross NPAs to 2.24% and Net NPAs to 0.57% at the end of FY24 showcases SBI’s efforts to improve asset quality and financial performance. The bank’s credit cost has also decreased by 3 basis points, underscoring a strategic approach to risk management and financial sustainability.
