"Typically, we see it as the GDP growth rate plus inflation, plus an additional two to three percent. That gives us the percentage of around 14%," Khara said in an interview with PTI.
According to SBI chairman Dinesh Kumar Khara, the bank is anticipating loan growth of 14–15% in the fiscal year 2024–2025 given the present pace of economic development.
"Typically, we see it as the GDP growth rate plus inflation, plus an additional two to three percent. That gives us the percentage of around 14%," Khara said in an interview with PTI.
Therefore, 14–15% credit growth is appropriate given our risk tolerance and relies on the lending possibilities available. We'll be content to expand at this rate," he said.
According to him, deposits increased by 11% the previous year.
"And we have some elbow room available when it comes of excess SLR and which ensures that consumers don't have any pressure on us to raise the deposit interest rates for supporting my loan-to-deposit ratio," he said.
The surplus Statutory Liquidity Ratio (SLR) of the bank ranges from Rs 3.5 lakh crore to Rs 4 lakh crore.
"I should also mention that we only have a loan-to-deposit ratio of around 68–69%. That gives us considerable leeway to lend without raising the interest rates on deposits.
Still, he said, "We always prioritize deposits. We decided that there was potential for improvement and that we should, at least in part, enhance our deposit growth rate this year, which is why we recently raised the interest rate on short-term deposits. And we're working to ensure that this year we expand by at least 12–13 percent." SBI increased the fixed deposit rate by up to 75 basis points on a few short-term maturity options last month.
The rate for 46-179-day retail term deposits went from 4.75 percent to 5.50 percent, an increase of 75 basis points.
In response to a question on the Net Interest Margin (NIM) forecast for the current fiscal year, Khara voiced optimism, stating that it will likely hover around the level seen in FY24 or maybe rise by two to three basis points.
The bank's domestic NIM for FY24 was 3.43 percent, down 15 basis points (bps), while the bank's overall NIM was 3.28 percent, down 9 bps on an annual basis.
One of the main factors influencing NIM in FY24 was the increase in dollar and rupee liquidity costs brought on by the strict monetary policies implemented by central banks throughout the world.
Regarding Non-Performing Assets (NPAs), Khara said, "Both the net and gross should be on a declining track. Since it also depends on the macroeconomy, forecasting is very challenging." Despite the bank's efforts to protect its books from macroeconomic stress, it is difficult to provide any type of warning on non-performing assets (NPAs).
"Our guidance as far as our credit cost is concerned, we were able to maintain it at 0.50 per cent but our intention is to keep it at the level of 0.29 per cent," he said.
SBI's net non-performing asset (NPA) was up 10 basis points year over year at 0.57 percent, while the company's gross NPA decreased to 2.24 percent, a reduction of 54 basis points over the prior FY23. At the conclusion of FY24, the credit cost decreased by 3 basis points to 0.29 percent.
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