Leading Indian lender SBI aims to achieve double-digit deposit growth


A man checks his mobile phones outside the State Bank of India (SBI) branch in Kolkata, India, February 9, 2018. REUTERS/Rupak of Chowdhuri

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MUMBAI, Sept 16 (Reuters) – State Bank of India (SBI.NS), the country’s biggest lender, is targeting double-digit growth in deposits as demand for loans intensifies and line utilization existing credit conditions are improving, a senior executive said on Friday.

“We think 9% to 10% growth (deposit growth) is very possible for us, it’s a sustainable growth rate, although we have an internal target of 11% to 12%,” SBI chief executive Challa Sreenivasulu Setty told Reuters. .

Along with intensifying efforts to collect more domestic deposits, banks are also seeking foreign deposits more aggressively.

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Setty said foreign currency deposits of non-resident Indians in domestic banks “still need to be improved”, even after banks raised interest rates.

“I think we still need to see more momentum in those FCNR streams,” he said.

In the quarter ending June, SBI’s filings increased 8.73%, down slightly from the March quarter. Advances from the bank have increased by 15 to 16% per year.

SBI also saw its use of the line of credit increase by 10 percentage points a year ago to almost 60%.

“We are seeing an increase in capacity utilization in many sectors and in the use of working capital, which shows that the growth momentum will continue.” he added.

The SBI increased its domestic lending by 14.93% year-on-year last quarter, driven by strong growth in retail lending. He expects his portfolio of international assets to continue to be around 15% of total assets.

SBI had international gross advances of 4.49 trillion rupees at the end of June, up more than 20% from a year ago.

The bank also aims to focus on increasing its commission-based revenue from its overseas operations.

“We would now like to focus on how we can increase our fee-based revenue, if we can take larger stakes and also be part of club deals and be part of creating and then distributing later,” said explained Setty.

The bank remains vigilant about the volatile global economic scenario and may revise its growth strategy for international operations as the situation evolves, he said. For now, the asset quality of this portfolio remains solid, with a bad debt ratio at 0.52%.

SBI shares are up 22% so far this year.

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Reporting by Nupur Anand and Swati Bhat; Editing by Kim Coghill

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