SBI looking to revive corporate lending this year: Chairman Rajnish Kumar

The SBI chairman hopes to register an overall credit growth of 10% in the current year

State Bank of India (SBI) Chairman Rajnish Kumar on Friday said the bank is looking for some good opportunities in corporate lending in the current year as it was now in a position to revive the credit growth in a risk militated way. 

"While the lending pattern is still on the consumer loan side and SME (small and medium enterprises) is showing a good pickup, we do expect the same in corporate credit also because, now, more or less, we have put our house in order. So, we are looking for some good lending opportunities. This year, our corporate lending will definitely revive," the chief of the country's largest bank said, while hoping to put the worst phase behind as far as the bad debt problem was concerned.  

Hoping to register an overall credit growth of 10 per cent in the current year, the SBI chairman said that sectors like cement, roads, steel, auto and auto components have started doing well, while investments were also happening in the renewable energy and oil and gas sectors.  

Speaking to reporters after participating in a host of corporate social responsibility activities in Hyderabad, Kumar said the bank will be able to start making profits from the September quarter onwards, helped by an increase in recovery and decline in the provisioning requirement going forward.  

The SBI chairman expressed confidence that in seven of the 11 cases (power assets) that were identified for resolution outside the insolvency resolution framework, the process would be completed in the next week. The Reserve Bank of India's (RBI's) deadline for the resolution of stressed assets by lenders outside the insolvency proceedings ends on August 27.   

"Intent of the bankers is very clear. The process is almost complete. When I say the process is complete, it means there are buyers for these assets, the price discovery has happened in a transparent manner... What remains to be done is just the documentation part by the lenders," the SBI chief said.

If they are unable to complete the process in any of these cases, the only option left for lenders is to seek insolvency resolution under IBC, he added.  

The upcoming resolution of large non-performing asset (NPA) accounts within and outside the National Company Law Tribunal (NCLT) framework, on the one side, and the entire mark-to-market provisioning SBI had done in the June quarter, instead of spreading it over four quarters, on the other side, was going to mark the turnaround starting the second quarter, according to Kumar. 

"The pressure on profits of banks is largely coming from the provisioning. Last year, we have done Rs 700 billion and before that, we did Rs 550 billion. As our provisioning requirement starts coming down, which is already happening, automatically, we start making profits. In June, probably, I could have been in marginal profits, but the mark-to-market provisioning was unexpected," he said.