The demand for term and project loans has almost dried up even as deposit accretion has been robust in the first half of the current financial year, according to State Bank of India Chairman Pratip Chaudhuri.
While deposits have grown by Rs 82,000 crore in the reporting half, loans (working capital and retail) have moved up by Rs 43,000 crore, said the SBI chief.
The credit-deposit ratio (domestic) of India’s largest bank has come down from 77.75 per cent in the April-June 2012 quarter to 76.64 per cent in the July-September quarter.
As the bank has excess liquidity of Rs 70,000 crore, it will go slow on deposit mobilisation to hold up the net interest margin, which edged down to 3.34 per cent in the July-September quarter, against 3.81 per cent in the year-ago period.
The current liquidity level will support loan expansion in second half of the year.
Net interest income
The SBI chief said next week the bank will take stock of the net interest income figure for October to take a call on cutting lending rates.
Chaudhuri said the bank has curtailed loan expansion in the mid-corporate and small and medium enterprise segments due to increase in delinquencies.
However, the SBI chief said “The bad (loans) story is already over. (Going forward) There is not much pain to come.”
Though it has seen a muted home loan growth of Rs 3,000 crore in the second quarter, SBI expects its home loans portfolio to expand by Rs 30,000-40,000 crore in the current financial year on the back of softer lending rates.
Of the total projected expansion in the home loan portfolio, the bank expects about 20 per cent to come from migration of loans from other banks, said A. Krishna Kumar, Managing Director.
As at September-end SBI’s home loans portfolio stood at Rs 1,08,381 crore.