Saw some seasonality in Q1 NPA nos: SBI chief

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26 Aug, 2025 12:21

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The country's largest public sector lender today posted a mixed set of quarterly earnings today -- with profit beating estimates while total income and margins disappointed the street.In an interaction with CNBC-TV18's Manasvi Ghelani, SBI Chairperson Arundhati Bhattacharya spoke about the bank's asset quality and the earnings picture. Below is the transcript of the interview on CNBC-TV18.Q: How do you see the NPA problem panning out ahead?A: There will be a decline. Again as I said there are certain there are certain cyclical factors that affect us in the first quarter. It has always shown up in the first quarter. Going forward I don't think these exact factors will be there in the second quarter. Overall I have been saying that we are seeing the easing of stress.Retail which is very effort-elastic suffers a little in the first quarter also because the agri portfolio is in the retail and agri always does badly just before the monsoon becuase farmers are still not very forthcoming unless and until they know that the sowing season has actually starting. This time actually monsoon came a little early but even then we have not seen that kind of pick up. Hopefully going forward things will look better. Already in July we are beginning to see a good pullback in the retail side. So, I am not very worried.Q: Are these accounts on the corporate side that slipped into non-performing Assets (NPA). Where are they coming from, are these on key assets and specific to an sector?A: No, not really. They are not specific to any sector and on the corporate side the slippages have been much less. Nothing on the large corporate side at all, some on the mid-corporate side but again it is spread across the sector. It is basic weakness of the accounts themselves because they just don't have the staying power to go with the downturn in the economy.Q: Going forward two things; one on growth and one in your outlook on margins. You said you want to keep your credit growth intact at 14 percent and you have not revised your guidance but on ground activity does give you that positive sense?A: On ground activity we have tried to take a micro level review to see whether it is possible. At this point of time it still seems possible. So, we will just wait it out a little and see. Regarding margins as I said margins will be impacted by the fact that we have cut our rates on the base rate side, on the borrowal side. We have also cut on the deposit side, the deposit is taking a little more time to reprise which is normal and I have been saying this time and again that we need to make up on volumes what we will lose on the margins. Those volumes has not come as yet. So, we have to wait for a little bit for those volumes to come back. But I am quite hopeful that the profitability that we have been showing last year that we will be able to come back to those levels. Yes, it is taking a little time but we need to be patient.Q: No major sales to asset reconstruction companies (ARC) this quarter but there were reports that you are looking to sell about Rs 4,400 crore to ARCs. If you could tell us can we expect this in the next quarter or that is an FY16 target?A: Some might happen in the next quarter, not all of it and yes it is 2015-16 target. So, it will take time because the ARCs again have taken quite a bit in the last quarter. They need to sort of get their resources in order also before they come and actually take these on but the showing to the ARCs, the engagement with the ARCs is fully on.Q: Recoveries will be in the same line next quarter as well because right not it is about Rs 1,200 crore odd?A: Recoveries should be better. Recoveries we are doing many things, so we should see more.Q: So upward of what it is at the moment?A: Yes.