See retail business growing by 3-4% in FY17: SBT

About 51 percent of State Bank of Travancore's business comes from its retail segment. The bank's Chief General Manager Retail Banking, EK Harikumar expects the retail business to rise by three to four percent this fiscal. Talking about the State Bank of India (SBI) merger, Harikumar said that it is still at an exploratory stage. Below is the verbatim transcript of EK Harikumar\\'s interview with Surabhi Upadhyay on CNBC-TV18.Q: As we wait for the formal approval and the whole process to kickoff, what are the first steps at State Bank of Travancore (SBT) that you would be taking and what sense you get when you talk to the employee union as to how much of support can you expect?A: It is at an exploratory state at this moment. The permission is to given to enter into a negotiation to acquire the businesses, so a lot of things to work from today till the date it happen. Q: I am trying to figure out the cost that might be involved when we are looking at the amalgamation and what your sense is when it comes to SBT's unions, if you could give me some sense on that?A: We have not received any official communication from the unions. It is only in newspapers that they are going on strike, they are objecting to it but we are yet to receive any notice from them.Q: On the business itself, how would you describe the health of the retail book right now and the growth rates that you are envisaging for FY17and also we were in conversation with the former MD of State Bank of Mysore last evening and he was explaining how SBM for instance, in that market in Karnataka was being forced to compete with SBI in retail loans and therefore this merger makes a lot of sense for them. So how this plays out for the retail lending side for SBT?A: For last many years SBT has been focusing more on the retail business. However, now 51 percent of our total business portfolio is from the regional segment. We are planning to continue in this year and the years to come, which of course is in tandem with SBI\\'s plan also for India as a whole. In Kerala both SBT and SBI work simultaneously with same business environment, so we can work in tandem; with same policy, same philosophy.Q: Fifty one percent of SBT\\'s book is retail and growing at a rate of how much and what should we expect for FY17 in terms of growth in retail?A: Our plan of action for the current year is 61 percent on the retail side which includes the micro, small and medium enterprises (MSMEs) as well as agriculture portfolio.Q: The market for obvious reasons is ascribing much higher premium to banks with a retail focus because of the fact that they do not have the asset quality problems that the corporate book has right now. Can you give us some sense on the outlook in terms of the asset quality of the retail book itself?A: Asset quality of retail book is comfortable for our bank and going forward we want to stress more on this area with more stress on mudra loans and MSME advantage. We have found that there is a tremendous untapped potential within the state of Kerala and most probably with SBI also in the same line will be able to make good in this area here.Q: I don't have your latest numbers with me right now but if you could give me gross non-performing assets (GNPA) figures and also as of now 51 percent of your book is retail. What does that translate into in terms of rupee crore, the absolute number?A: As compared to other public sector banks our bank is the lowest in percentage at 4.59 percent in terms of NPA which is less than 5 percent. Our NPA plus our restructured advance is much below 10 percent which is one of the lowest compared to other public sector banks. Thanks to our planning of last two years and being very prudent in our new advances as well as our NPA recovery efforts. Q: You are hoping that your retail book which is 51 percent of the business will become 61 percent of the business in the next one year. Where is the bulk of this growth?A: I said for the current year\\'s growth is expected 61 percent from the retail.Q: What is the rate of growth you are expecting in the retail book in FY17?A: Between 3 and 4 percent.Q: Isn't that slightly cautious and much muted outlook in terms of retail lending, a lot of the private sector banks are working with far higher or bigger targets?A: Three-four percent in a scenario like Kerala, I think it is not too conservative coming from the fact that we are expecting almost 61 percent of the entire portfolio from the retail space.