June 02, 2012 / 14:26 IST
Saikat Das
Moneycontrol.com
India's banking behemoth, the
State Bank of India (SBI) is likely to grow its corporate loans at a higher pace than that of its overall loan expansions, projected at 15-16% for 2012-13. According to Santosh Nayar, Deputy Managing Director (Corporate Banking Group), the bank’s dominant presence in project financing will support the growth despite the prevailing gloom in economic activities.
"Today, one cannot think of any big project without SBI's participation as a lender. We neither have any plan to bring down the current share of corporate loans nor have any sectoral bias in extending credit in FY13. Certainty over cash flow and required approvals for a project are the two key parameters to avail credit from us," he told
Moneycontrol.com in an exclusive interaction.
The bank's total loans expanded nearly 15.8% y-o-y to Rs 8.93 lakh crore for the year ended March 31, 2012. The share of corporate loans stood around 33% wherein large and mid size companies constituted 14% and 19% respectively.
Credit demand...Investment is not taking place. Credit demand, according to Nayar has slowed down both from big and small companies. There is no immediate sign of revival. This might also lead to some unexpected asset quality problem for the bank.
"The worst is over for bad loans. However, nobody knows the future especially in an uncertain time. In 2012-13, we may see two-three more big accounts coming under stress. As on date, they are all performing assets. Later, they may have to be referred for restructuring," the DMD said.
Asset quality...Recently, SBI boss Pratip Chaudhuri said that net non-performing ratio would reduce to 1.62% from the present 1.80%. Kingfisher Airlines and Air India were two major problematic accounts for the lender. While it had already identified KFA as non-performing asset, the government has been providing a relief package for AI.
"Asset quality is likely to improve. Wherever we are expecting some stress that will not dent our book deeper. SBI's total exposure would not be more than Rs 1,000 crore for those two-three accounts. Our credit off-take in troubled sectors like textile, construction and iron & steel sectors will slightly come down in FY13. Moreover, the tool of restructuring is always there to tackle big defaults," Nayar pointed out.
The variation in cotton prices has virtually landed the textile owners in troubled water while lack of on-time payments is constraining construction activities. The lender's credit exposure to sectors including textile, iron & steel and construction stood at 3.91% (Rs 35,000 cr), 4.97% (Rs 44,400 cr) and 1% (Rs 9,000 cr) respectively as on March 31, 2012.
And the promise..."Challenges are common in any business. One should not look back what happened in the past. I have always done well at the time of adversity. This year too, there may not be any reversal of trend," concluded the veteran banker.
In last one year, SBI shares decreased nearly 11% as against 13.20% fall in the benchmark index - Bankex.
saikat.das@network18online.com 
