Expect improvement on cost side in next 2-3 quarters: SBI

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26 Aug, 2025 12:21

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India's largest bank is stuck in a rut, for the fourth straight quarter SBI’s profits are down and this time by 34 percent thanks to higher provisioning. The bank also saw bad loans rise in the third quarter, but lower restructured assets and net interest margins gave some solace. Chairperson Arundhati Bhattacharya spoke to CNBC-TV18’s Gopika Gopakumar about the performance of the PSU lender and the road ahead.

Below is the verbatim transcript of Arundhati Bhattacharya’s interview with CNBC-TV18.

Q: What would you say about NPAs?

A: Right from the beginning I have been saying that the mid-corporate group (MCG) and large SME is experiencing a lot of stress. The reason is all of these borrowers are in single lines of activity. They don’t have the balance sheet strength to bring money from elsewhere. They have very little access to other sources of funding. To that extent they don’t even have deep pockets, so any extended downturn is going to impact them.

Out of this Rs 11,000 crore you would have seen some Rs 9,500 crore has only come from this segment. This is something that I have always been saying. Also this Rs 8,000 crore I don’t know where the market got it from unless it was the last quarters figures. I cannot rely on these numbers unless I have seen the numbers two quarters atleast going forward. When you see a number for three quarters then you know this is something that can be relied on. At this point of time, it is still a little uncertain as to which one will go and which one will not.

Q: We have seen a write off of over Rs 5,000 crore this quarter. This is quite rare in the sense SBI in the past under different leaderships has not seen this kind of write offs. Under your leadership are you going to maintain this kind of level and why now? Why this quarter you decided to write off such a huge amount?

A: We have to make a start some time. The number appears very huge because it has been very minimal in the past. In the past, the confidence was not there that even if we write it off we will be able to continue looking at these accounts and follow them up for recovery. Now I am confident that we have put in place the system to ensure that these do not go outside our attention span.

Q: You have almost laid out a roadmap this quarter for the coming quarters and the coming years. When do we see the impact of these efforts especially with regards to improvement in asset quality whether it is with regards to recovery of assets or upgradation and also in terms of savings especially on the cost side?

A: On the cost side, I hope going forward we will be able to show something in the next two-three quarters. In April we start the budgeting exercise. Currently, we are only trying to do it from the macro level which is a little difficult because the budgets are already out there. So, we will be trying to do that come April. So, may be June quarter and the September quarter you should see the impact there. In respect of the asset quality, this is not something where the stress is going to disappear, if your GDP numbers don’t come up, if your IIP numbers don’t come up - those have to come up. Without those coming up the stress cannot materially suddenly disappear from your books. However, we can do early management and that is precisely what we are trying to do.