SBI expects retail portfolio to constitute 60% of overall loans this fiscal: MD Gupta

With muted demand for funds from corporates, the SBI is expecting its retail portfolio to go up to 60 per cent of total loans by the end of current fiscal, a senior official said.

"We expect our retail portfolio to be constituting 60 per cent of loans by the end of this fiscal because the corporate demand is still very-very muted. So, we expect the retail loan portfolio to grow by around 14 per cent this fiscal," P K Gupta, Managing Director (Retail & Digital Banking), State Bank of India (SBI) said in an interview to PTI.

The retail segment, comprising of personal, small and medium enterprises (SME) and agriculture, constituted 57.5 per cent of SBI's domestic loan book at over Rs 17.46 lakh crore during 2017-18.

Within the retail segment, Gupta said the bank expects personal loans, including housing loans to be growing at about 18 per cent, while SME and agriculture lending to be at sub-10 per cent.

"So overall, over 14 per cent is what we are projecting as growth in our retail portfolio. For the corporate sector, I think the demand is still very-very muted so that will probably bring down the overall disbursement on the credit side. But, on the retail side, I think we will continue to expand," the official said.

During the fiscal ended March 2018, much of the growth in credit demand came from personal front such as retail, home and auto loans.

The bank's retail loans grew by 13.55 per cent, in line with the bank's strategy. Within retail, home loans were up by 13.26 per cent to Rs 3.13 lakh crore.

Home loans now constitute more than 57 per cent of personal retail loans.

The sluggish demand from the corporate sector is mainly attributed to the fact that the investment made by them is not fully utilised, moreover, there is a twin balance sheet problem with them, he added.

"The balance sheets of the corporate sector are itself stressed, so they don't really have money to invest in projects. If you look in terms of new projects, there are hardly any new projects that are coming, so the corporate are not able to invest," he said further.

Even as the banking sector do have a problem of stressed assets, due to which some of the banks are not able to lend, but it is not the case that the banks' ability to lend or not lend has been the reason for the credit growth (in corporate), Gupta said.

"I think it is more on the demand side. So, if there is a good viable project, I don't think funding has been an issue so far," the official said.