Amid tepid demand from large companies, the State Bank of India is targeting mid-sized businesses to boost its corporate loan book. “Last year, our mid-corporate loan portfolio grew by 18% to Rs 1 lakh crore. The potential has encouraged us to further grow loans to this segment,” a senior official of the bank told FE. The segment has been doing well, with the asset quality not deteriorating significantly. “Moreover, borrowers are not very price-sensitive,” the official added.
Commercial client group drives growth
At SBI, the mid-corporate portfolio is housed in the commercial client group (CCG), which caters to the credit needs of both mid and large-sized corporate. The advances under CCG stood at Rs 6.68 lakh crore as of March, registering a growth of 16% over FY24.
The loan growth was driven by sectors such as non-banking financial companies, infrastructure, services, power, chemicals and engineering and this year, the lender intends to focus on manufacturing, power and NBFCs.
Muted demand from large corporates
The bank expects credit to grow at 12-13% in FY26; the expected system growth is about 11.5%. In Q1FY26, advances grew by 11.9% y-o-y. Last year, advances grew 12% with retail loans growing at a modest 11.4%. At the end of June, SBI’s total advances to corporates stood at Rs 12 lakh, up 5.7% y-o-y.
Non-food credit growth for the banking system inched up marginally to 9.5% y-o-y in July compared with 8.9% y-o-y in June, analysts wrote. Growth in loans to MSMEs rose by a reasonably good 15.3% y-o-y. Credit to the retail sector increased by 11.9% y-o-y during the month, while the increase in corporate loans was 5.9% y-o-y, according to analysts at HSBC. Corporate loans include credit to industry and services but exclude loans to micro and small industries, transport operators, and trade finance.
Aniket Dani, director at Crisil Intelligence, pointed out that demand for credit from large companies has been very slow. “Also, they are moving to the bond markets as they get better rates due to a 100-bps policy rate cut,” Dani explained.