State Bank of India (SBI) expects to disburse Rs 1.4 trillion worth of corporate loans in the next two-three quarters. SBI chairman Dinesh Khara told analysts that proposals which are awaiting sanctions are of around Rs 3.3 trillion.
“We have approximately Rs 1.4 trillion worth of proposals pending for disbursement, we expect them to get disbursed in the next two-three quarters,” Khara told analysts in an earnings call.
The bank’s loan book rose 12% year-on-year (YoY) to Rs 34.11 trillion as on September 30, 2023. Corporate loans grew 7% YoY to Rs 9.77 trillion.
The bank is witnessing a pick-up in demand for working capital and term loans from corporates. “We have seen an improvement of over 100 bps in availing of term loans during the second quarter. The utilisation of working capital loans has also improved,” Khara said.
The bank will not be looking to aggressively grow its international loan book considering ongoing geopolitical tensions. “We do not want to go very aggressive on international book because different geographies are behaving differently, and that is the reason why we want to confine ourselves to some of the stable geographies like the US, the Middle East and Japan where we have grown in this quarter also,” said Khara.
SBI did not grow its international loan book in the previous quarter as it was trying to assess the evolving global situation. However, some clarity has emerged, encouraging the lender to grow loans in stable regions.
The bank is targeting a credit growth of 12-14% in the current financial year, with the management indicating that it may be surpassed.
“We have been indicating that we will be growing in the range of 14% and I would like to surprise the market on the higher side,” said Khara. “My suggestions are always a little conservative.”
The domestic net interest margin (NIM) moderated 4 basis points quarter-on-quarter to 3.43% in the July-September period. Margins are expected to shrink by another 3- 5 bps in the next quarter due to the increase in interest in term deposits over the past few quarters.
“We have not increased interest on deposits for quite some time, but whatever repricing has happened, I think perhaps it will be fully panned out by the next quarter,” said Khara. “We may see a compression of 3-5 basis points in the coming quarters.”