SBI aims to Maintain Margin, Complete Merger process by FY17-end
State Bank of India (SBI), which saw a sharp decline in its slippages in the first quarter, is expecting strong growth in advances to counter pressure on margins. “Margin depression due to bad loan creation will hopefully reduce,” says SBI’s Chairman Arundhati Bhattacharya. Pressure will also reduce as deposit rates come down along with cost of funds.
The country’s largest public sector lender reported a 31.7 percent dip in net profit to Rs 2,520.96 crore while the net interest income rose 4.2 percent to Rs 14,312.31 crore in Q1. Inflation, which was higher in July on back of higher food inflation, is expected to ease a little in August.
However, liquidity continues to be good, she says, adding, the Reserve Bank should come close to achieving its 5-percent inflation target for January-March 2017. Pay hikes as well as festival season could lead to improvement in loan growth for the bank. Bhattacharya also reiterated the slippages guidance of Rs 40,000 crore for FY17.
“We are fully in control,” she says, adding, most of the big accounts have already been classified by SBI. Speaking on merger with its associate banks, Bhattacharya says the plan is to complete the exercise by end of current fiscal. The benefits of this, however, will be seen over next two years.
0 Comments