Dinesh Kumar Khara, Chairman, State Bank of India (SBI), talks about Q3FY22 numbers, net interest income, loan loss provision, loan book outlook and home loans among others during an exclusive interview with Swati Khandelwal, Zee Business. Edited Excerpts:

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Q: The largest public sector lender has posted good numbers and the net profit has risen more than 60% in this quarter. Despite this why has the NII (Net Interest Income) has grown in single-digit only?

A: It is such that the provisioning requirements have declined due to which there is a growth in the profit. But the NII growth comes from the growth of the loan book. A good trend is visible in the growth of the loan book and our retail has grown by 14%. And, if we will have a look at the rest of the loan book then there is a growth of around 8%. This is why our NII grew by around 6.68% as our yield of advances has reduced. The yield of advances has reduced as a lot of liquidity was available in the market till December.

Q: In this quarter overall provisions have come down but why has the loan loss provisions risen this Quarter?

A: It is so that the loan loss provision runs through hedging and the hedging of the old assets has increased which led to an increase in the loan loss provision. But our slippages are quite low, hardly I would say. This is why the loan loss that is visible in the provision is essentially a hedging provision.

Q: Going forward, how the loan book outlook is looking like? With infra CapEx for government rising this year do you expect corporate loan book to grow strongly? Do you expect private CapEx to follow after public spending? 

A: We have seen that the working capital unavailed limits have been reduced. The unavailed (unutilised) limit stood which stood around 52% in the September quarter has come down to around 43%, which means the availment has increased by 9%. Similarly, the term loans on a year-on-year basis from December 2020 to December 2021, the unavailed term loans has reduced by around 8%. So, combining all these, we already have a sanction of around Rs 4 lakh crore and I expect that it will be utilised in the coming days. In addition to this, the pipeline is quite healthy and I expect that due to the infrastructure-related focus seen in the Budget a huge growth is likely to be seen in the core sectors. As there is a growth in the core sectors as we have seen in the previous year that around 100% capacity of iron and steel is utilised, so, I believe that further capacity additions will be seen in the recent future in the Core sector. Apart from that, we support the infrastructure and will continue to support it and it will support us in our credit growth.

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Q: On the retail side, do you believe that the way home loan has grown and we have seen good response till date will continue further at these levels or can be better from here?

A: Our home loan has grown by around 11% but the kind of unmet demand is present in the country I believe that we will be able to grow at the same rate.