Mumbai State Bank of India (SBI) has revised its credit growth outlook to 14-16% for the current fiscal, driven by a strong revival in the capex cycle and corporates with rupee debt replacing foreign debt, Chairman Dinesh Khara said on Saturday. The bank had earlier projected FY23 credit growth at 11-12%.
SBI has a pipeline of corporate loans 3.5 trillion under approval, Khara said. Capacity utilization is also showing signs of improvement. The country’s largest lender is seeing demand from infrastructure, renewable energy, oil and marketing companies and services sectors.
“It was a busy quarter. That is why we had a strong credit growth. However, I still expect, given the current trend, we should have credit growth of 14-16% in the current fiscal,” He said after the announcement of the bank’s July-September results.
During the second quarter, the overall loan book grew 21% year over year. The bulk of the growth has come from large corporate and personal loans. International trade witnessed strong growth during the quarter with credit growth at 18% y-o-y in dollar terms.
SBI is the harbinger of credit growth in the banking system which currently stands at 16% annually. Other large banks such as HDFC Bank, ICICI Bank and Axis Bank also posted strong year-on-year growth in Q2 of FY13 and are expected to maintain this level of growth.
The credit growth comes on the back of excellent second quarter data for SBI. At September-end, SBI reports 74% growth in net profit 13,260 crore on account of strong growth in non-interest income and higher net interest margin. Net interest income saw steady growth of 13% year-over-year, from 3.02% in Q1 to 3.32% in Q2 due to healthy loan growth and margin improvement.
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