The State Bank of India is hopeful of its asset quality improving in the current quarter.
According to Rajnish Kumar, Managing Director (Compliance & Risk), SBI, the “stress seen in asset quality of earlier quarters” is likely to “level out”.
“We cannot say for certain whether the worst is over. But we will see stress in asset quality levelling out this quarter,” he told reporters on the sidelines of a Banking Colloquium organised by the Confederation of Indian Industry (CII).
In the April-June quarter of this fiscal, SBI’s fresh slippages from standard to bad loans stood at ₹7,318 crore, down from ₹9,932 crore in Q1 FY15.
The bank’s asset quality, however, improved with gross bad loans or non-performing assets (NPAs) declining to ₹56,420 crore from ₹60,434 crore a year ago. Gross NPAs as a percentage of total loans fell to 4.3 per cent (4.9 per cent a year ago).
According to Kumar, two of the stressed sectors — power and steel — are expected to show improvement in the next six months. “Of late, there has been stress in power and steel sectors. However, demand in the power sector is expected to go up,” Kumar said.
The move to announce a 20 per cent safeguard duty on imported steel in order to boost domestic production and sales will help the sector, . he added.