India’s SBI sees loan growth to remain strong after record profits
MUMBAI, November 5 (Reuters) – State Bank of India (SBI) (SBI.NS)the country’s largest bank, expects credit growth to remain in the double digits as it ramps up efforts to attract more deposits, seeing growth in line with the sector.
The bank reported a 74% increase in its quarterly net profit on Saturday, driven by higher loan growth and improved asset quality.
Net profit rose to a record 132.64 billion Indian rupees ($1.62 billion) in the June-September period, beating analysts’ expectations of 105.30 billion rupees, according to IBES Refinitiv data.
Net interest income, the difference between interest earned and paid, rose 13% to Rs.351.82 billion.
Advances grew 18.15%, while deposits rose 9.99%.
“We should have 14-16% credit growth in the current financial year,” Chairman Dinesh Kumar Kara said at a press briefing.
“Now, we also have investments in Treasury, which we expect to resolve. That is why we are confident in supporting credit growth,” he said, adding that capacity utilization has improved and business has returned to pre-pandemic levels.
The bank has a term loan pipeline of Rs2.4 trillion as it sees demand coming from sectors such as infrastructure, renewables and services.
Although the bank has not set a target growth for deposits, Khara said the SBI will not lag behind the industry.
Central bank data showed that Indian banks saw a 17.95% year-on-year jump in credit growth for the two weeks to October 7, and market participants expect growth to accelerate in the coming months. Deposit growth reached 9.63% during this period.
The SBI’s primary net interest margin (NIM), a leading indicator of profitability, improved to 3.55% from 3.50% a year earlier. It expects to maintain local NIMs at current levels.
The lender’s asset quality also improved, with total non-performing assets down to 3.52% from 3.91% in the previous three months. Net NPA also improved, dropping by 20 basis points.
Total provisions decreased to 30.39 billion rupees in June-September period from 43.92 billion rupees in the previous quarter.
The bank’s capital adequacy ratio was 13.51%, up from 13.35% a year ago.
(1 dollar = 81.9620 Indian rupees)
Additional reporting by Nupur Anand in Mumbai and Neha Arora in New Delhi; Editing by Mark Potter
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