India’s top lender SBI aims to achieve double-digit deposit growth
A man checks his mobile phones in front of State Bank of India (SBI) branch in Kolkata, India, February 9, 2018. REUTERS/Rupak De Chowdhuri
Mumbai, September 16 (Reuters): State Bank of India (SBI.NS), the country’s largest lender, is aiming for double-digit growth in deposits as loan demand gathers steam and utilisation of existing credit lines improves, a top executive said on Friday.
“We believe 9% to 10% (deposit growth) is definitely possible for us, it is a sustainable growth rate, though we have an internal target of 11% to 12%,” Challa Sreenivasulu Setty, managing director at SBI, told Reuters.
Alongside stepping up efforts to garner more domestic deposits, banks are also seeking foreign deposits more aggressively.
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Setty said foreign currency deposits of non-resident Indians in domestic banks “still needs improvement” even after banks have increased interest rates.
“I think we have to still witness more momentum in these FCNR flows,” he said.
In the quarter to June end, SBI’s deposits grew 8.73%, registering a marginal decline from the March quarter. The bank’s advances grew 15-16% annually.
SBI has also seen its credit line utilisation inch up by 10 percentage points over a year ago to nearly 60%.
“We are witnessing capacity utilisation going up in many industries and working capital utilisation is also going up which shows that growth momentum will continue.” he added.
SBI expanded its domestic loans by 14.93% year-on-year in the last quarter, led by strong growth in retail loans. It expects that its international asset book will continue to be around 15% of the total assets.
SBI had international gross advances of 4.49 trillion rupees at end-June, up over 20% compared to last year.
The bank is also aiming to focus on boosting its fee-based income from its overseas operations.
“We would like to now focus on how we can increase our fee based income, whether we can take larger participations and also be part of the club deals and be part of the origination and then distribute later,” Setty explained.
The bank remains watchful about the volatile global economic scenario and may review its growth strategy for international operations as the situation evolves, he said. For now, asset quality in this portfolio remains strong, with the bad loan ratio at 0.52%.
SBI’s shares have risen 22% so far this year.Mumbai, August 3 (PTI)
Disclaimer :- This story has not been edited by The Sen Times staff and is auto-generated from news agency feeds. Source: Reuters