SBI aims for higher credit, deposit growth

The State Bank of India is aiming at a growth of up to 20-22 per cent in credit offtake and 25 per cent in deposits during the present financial year, way above the performance of last year when it had seen a mere 15-16 per cent growth in credit expansion and 18 per cent increase in deposits.

The optimism comes on the back of the 50-basis point cut in repo rate this week by the Reserve Bank of India and improved performance expected by the general economy in the year ahead, according to managing director A Krishna Kumar.

The bank has already reduced the interest rates on educational loans, and the same for auto loans would be effected in a day or two, he said here at the weekend.

The bank has already started adjustments in interest rates for individual segments and would be rationalising the small-ticket SME loans soon, according to him.

"While the credit growth in SME and agriculture sectors has been 18-20 per cent each, the lower credit offtake in mid-corporate and retail sectors have impacted the overall growth Of the credit portfolio last year.

Large SME and mid-corporate segments were under stress because of the general status of

the economy last year," he said.

According to him, a little more focus is needed on mid-corporate and retail segments to achieve higher credit growth for the present year as the SME sector has already shown signs of revival in demand last year.

A lot of advance-oriented products would be launched depending on the market situation and the requirements of individual segments during the year as an upswing in the economy is imminent to support these products, Krishna Kumar said.

Responding to a question, Kumar said there would not be any impact on the net interest margin, which was around 3.82 per cent as on December, 2011, even if the bank lowered the interest rates for the various segments in the days to come.

"It depends on how quickly we re-price the deposit rates. We can do it within 2-3 months," he said.

He expects the NIM to stay at that level for the full year.

On the bank's loan performance, he admitted there were slippages in terms of non-performing assets in the third quarter of FY12 but said the bank expected an improvement on this front in the fourth quarter.

For the full year, SBI is planning to add 1,000 more branches across the country to take the total size of its branch network to 15,000.