Despite a slower 4% credit growth in the first half of the year, State Bank of India (SBI) remains confident it will reach its target of 14-16% credit growth for the second half of FY25. The bank expects personal loans to keep growing, along with a stronger focus on dealer and vendor financing for small and medium enterprises (SMEs).
Challa Sreenivasulu Setty, the Chairman of SBI, mentioned during the bank’s Q2FY25 earnings call that personal loan growth has been strong and should continue through the rest of the year. Even with challenges like heavy rains, agricultural lending performed well in Q1FY25. Setty explained that the bank is expanding its agricultural loan options beyond just crop loans to include agri-infrastructure loans, loans for self-help groups, and agri-gold loans. Specialized agricultural credit centers and dedicated managers are also helping to improve services in this sector.
SBI is also focusing on SME loans, using data-driven, non-collateralized lending (loans that don’t require physical assets as security). The bank has introduced a Business Rule Engine (BRE) to speed up loan approvals for SMEs. This system can approve loans up to Rs 5 crore in just 15 minutes and disburse funds within two days if the loan is backed by a government guarantee.
For Q2FY25, SBI reported a 28% jump in net profit, reaching Rs 18,331 crore. Its net interest income (NII) grew by 5.37% to Rs 41,620 crore. However, its net interest margin (NIM) fell slightly by 15 basis points year-on-year and 8 basis points from the previous quarter, standing at 3.14%.
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