State Bank of India Chairperson Arundhati Bhattacharya on Tuesday said the economy is slowly recovering and this is clear from the bank’s loan slippage numbers, which have been coming down over the last few quarters.

“Traditionally, in the first quarter, we have always had higher slippages. If you go back three years, you will see that in the first quarter of FY14, it (slippage) was ₹11,000 crore; in Q1 FY15, it was ₹9,900 crore; and this time it is ₹7,300 crore.

“So, on year-on-year basis, actually the slippage numbers have come down substantially,” she said at the bank’s financial results press conference.

Bhattacharya pointed out that for the first time in the last eight quarters the mid-corporate slippages were very much under control. As on June-end 2015, non-performing assets (NPAs) in the mid-corporate segment was lower at ₹21,460 crore (₹24,652 crore as on June-end 2014). She said the mid-corporate portfolio is expected to stabilise completely two-three quarters down the line.

The only area where NPAs are up is in the SME (small and medium enterprises) segment, where they have gone up from ₹15,373 crore as on June-end 2014 to ₹17,260 crore as on June-end 2015. In all other segments — large-corporate, mid-corporate, agriculture, retail and international — the NPAs have come down.

“As you all know, when an economy goes into a tailspin, the first accounts that get hit are the SMEs and the last ones to recover are the SMEs…

“Even in SMEs, we are seeing that the loans above the ₹20-crore bucket are showing visibly less strain. And the maximum strain is still being seen in the ₹1 crore and less bucket,” said the SBI chief.

Lessening stress

Pointing out that the stress picture is much better, Bhattacharya said: “With some amount of confidence I can say that the recovery is having a beneficial impact on the books.”

“It (lower slippage) very clearly shows the trajectory that the economy is taking. The fact that the economy is slowly recovering is absolutely clear from these numbers themselves.

“For the first time, as I said, in very many quarters, we are beginning to see lessening of the stress in the mid-corporates,” explained Bhattacharya.

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