SBI Forecasts a Loan Growth of 14-15% During FY 2024-25, Says Chairman Dinesh Kumar Khara

State Bank of India’s Chairman Mr. Dinesh Kumar Khara talked about the Bank’s plan for the fiscal year 2024-25 after it recorded its highest-ever quarterly and yearly profit for Q4 and FY24 respectively.

Chairman’s Statement: 

In an interview with PTI, the chairman remarked that the bank’s credit growth rate is targeted to be 13-15 percent. To justify this percentage, he gave the measure of the credit growth as GDP rate plus inflation plus some 2-3% risk appetite. Thus, the 13-15% growth rate depended on opportunities available for lending and meeting the risk appetite. Talking about deposits, he mentioned the lag in the current deposit growth of the bank, 11%, and the ideal deposit growth of 13%. With the growth in the economy by 7.5% in the next financial year, the chairman exclaimed that this growth rate will provide a window for an ample amount of opportunities. With the bank’s loan-to-deposit ratio being around 68-69%, and the SLR between Rs.3.5-4 Trillion there is enough room in terms of excess SLR to not add any pressure to the Loan-to-Deposit ratio.

SBI’s plans for deposits

SBI plans to grow its deposits by 12-13%. For this, SBI increased the fixed deposit rate on short-term maturity by upto 75 basis points. For retail term deposits, it plans to increase the rate to 5.5% against an earlier rate of 4.75%. The rise in rupee liquidity and dollar liquidity cost affected the NIM of the bank in FY24. The domestic NIM of the bank stood at 3.43 percent for FY24 down by 15 basis points (bps) while the whole bank NIM stood at 3.28 percent lower by 9 bps year-on-year basis. The Gross NPA of SBI declined to 2.24 percent, an improvement of 54 bps compared to the previous FY23 while the net NPA stood at 0.57 percent, an improvement of 10 bps YoY. The credit cost also fell by 3 bps to 0.29 percent at the end of FY24.

Conclusion:

With the strong financial growth recorded in Q4 and overall FY24, SBI plans to tap the opportunities of the positive economy and grow further.

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