Business Standard

Gains ahead for SBI: Higher NIM could lead to double digit earnings growth

A recovering economy may lead to higher credit demand from corporates, despite rising rates and there are signs that retail consumption is picking up

state bank of india, sbi, banks, bank branch
Premium

Loan growth has accelerated – it is up 15% YoY and the fastest growth segments are high-yield retail and small and medium enterprises

Devangshu Datta
Conventional wisdom suggests that a rising rate cycle is generally bad for lenders. First, a portfolio of earlier loans at lower rates becomes less valuable. Second, higher rates generally lead to lower demand for loans so banks can also suffer loss of credit volume.
 
However, the current scenario has other macro-variables playing out and those may be more favourable. A recovering economy may lead to higher credit demand from corporates, despite rising rates and there are signs that retail consumption is picking up.
 
Loan growth has accelerated – it is up 15 per cent year-on-year (YoY) -- and

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Sep 23 2022 | 9:27 PM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com