SBI BETS ON PICKUP IN CORPORATE CREDIT TO DRIVE GROWTH

State Bank of India (SBI) expects corporate credit to pick up this year, thanks to fresh investments in infrastructure projects by the government and renewed demand from large borrowers.

“We are quite hopeful that in the coming days, the environment would be conducive for corporate credit growth,” Dinesh Khara, chairman of SBI, said after announcing the bank’s March quarter earnings.

Considering the bank’s unutilized portion of working capital limits and term loans and loan proposals in the pipeline, the bank has visibility on the credit of about ₹4.6 trillion. Companies are already utilizing a larger portion of their working capital limits sanctioned by the bank, at 56% now, with the demand for corporate credit picking pace from the December quarter.

“We are seeing much better capacity utilization in terms of the working capital,” Khara said.

On Friday, the bank reported a profit of ₹9,114 crore in the three months through March, up 41.3% from a year earlier.

This was driven by a 15.3% growth in net interest income, or the difference between interest earned and expended.

The bank’s domestic net interest margin (NIM), a key measure of profitability, stood at 3.4%, unchanged from the previous quarter. SBI’S gross non-performing assets (NPAS) were at 3.97% of its total loan book, down from 4.5% in the December quarter.

“Wherever we had the slightest doubt, we have already provided for. So, I do not think we would have any surprises coming from NPAS,” Khara said.

On Friday, the bank’s shares fell 3.76% to 445.05 on BSE.