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Informist, Thursday, Feb. 6, 2025

 

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--SBI Setty: Not concerned over gap in credit, deposit growth 
--SBI Setty: Maintain FY25 credit growth guidance of 14-16% 
--SBI Setty: Believe cost of deposits has peaked 
--SBI Setty: Continue to focus on improving current account deposits 
--SBI Setty: Credit growth continues to be robust across all segments

 

MUMBAI – State Bank of India aims to maintain its margins at 3% for the current financial year, even if the Reserve Bank of India cuts repo rate by 25 basis points, SBI Chairman C.S. Setty said in a post-earnings press conference. The Reserve Bank of India will announce the outcome of the Monetary Policy Committee meeting on Friday.

 

The bank's net interest margins for the reporting quarter was 3.15%, down from 3.27% in Jul-Sept and 3.34% a year ago. "Our book is significantly MCLR and fixed rate loans, and we have a combination of 60-40 as far as MCLR rate to floating rate...so, we don't see major impact on the rate cut in terms of the deposits or advances in the immediate future," Setty said.

 

He said that credit growth continues to be robust across all segments and maintained the credit growth guidance at 14-16% and the deposit growth guidance of around 10%. He also said that he was not much concerned about the gap in credit and deposit growth.

 

"We are not concerned in terms of the gap either widening or narrowing because we have adequate liquidity in our balance sheet, our CD ratio is not very high, we still have room to grow there and even if 10% (deposit growth) and we have excess SLR (statutory liquidity ratio) position that means whatever deposits we mobilise, the pre-emptions are limited there. That means our ability to lend on the deposit mobilisation is higher than many of the players in the market," Setty said.

 

Setty said that the bank is still focussing on improving their current account deposits but believes that the culture of investment and looking towards generating some good returns on our savings is here to stay.

On the growth guidance for the bank's unsecured book, Setty said, "I think we are seeing that the unsecured personal loan in our portfolio is showing good growth in the current quarter, which means that whatever we have had a lower growth rate in the last three quarters, we are able to reverse that now. And hopefully, I think we may not have that 30 to 35?GR in the unsecured personal loan, but definitely we will come to the double digits in there."

 

On the rising cost of deposits, Setty said that they have peaked and stabilised. The domestic cost of deposits continued to edge up, rising 4 basis points on quarter to 5.07% in Oct-Dec. In the third quarter of 2023-24 (Apr-Mar), SBI's domestic cost of deposits was 4.75%.

 

State Bank of India on Thursday reported an 84% increase in its net profit to INR 168.91 billion for the December quarter, beating the analysts' estimates. The country's largest bank's net interest income rose only 4% during the quarter, but provisions for bad loans jumped 31% on year.

 

On Thursday, the shares of State Bank of India closed 1.8% lower at INR 752.25 on the National Stock Exchange.  End

 

Reported by Kshipra Petkar

Edited by Akul Nishant Akhoury

 

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