SBI Beats Estimates In Q2, Profit Up 10% YoY | SBI Chairman CS Setty On SBI Q2 Results & More

Thank you Ritu. We see a robust credit demand coming back. As I mentioned, a lot of efforts being made both in terms of fiscal side as well as regulatory side. Announcements which have been made in terms of simplifying various activities in the banking space and the GST 2.0 and income tax benefit which was given earlier all are playing out now and we have seen the sustained consumption demand coming back and we have seen double-digit growth across the business segments except corporate credit and corporate credit also we have seen a turnaround. Last quarter we had an almost negative growth rate in the corporate credit but we have seen 7% corporate credit growth and we expect that this corporate credit growth will be double digit in the next two quarters. So I'm very very confident that I did mention on your channel when the banking announcements were made that at least 1% additional credit growth is feasible and I'm sticking to that.

Our credit cost guidance below 50 basis point is something what we mentioned. Even the slippage ratio would be 0.5% through the cycle is what we have guided which means that we expect the asset quality to be robust going forward also. So we have no concern in any segment. Currently almost all the segments are displaying high credit quality and there are no concerns in any of the segments.

So more than these two what you mentioned, I think the real economy whether it is in terms of home loan segment, in terms of the theme, in terms of agriculture, they are all witnessing a good growth rate. If you see in our portfolio in Q2, 14 to 17% growth rates across these segments. I think this is very important and we have a very large portfolio of these segments which means that a double-digit growth rate here will itself contribute to 12 to 14% credit guidance what I've given. And we also have a very significant pipeline on the corporate credit side and this pipeline, a part of which is converted into real sanctions and disbursement, is constantly getting replenished both in terms of the discussions which we've been having with the corporates. I assume that earlier also I mentioned that the sustained consumption demand which we are witnessing at this moment, maybe it's too early to talk about sustained consumption demand, we will wait for another couple of months. October has been a good month in terms of the credit growth across the segments and if that sustained consumption demand is visible, the private capital expenditure in certain sectors which we have not been seeing either steel, cement is likely to come back. There still will be a challenge because the large corporates have their cash balances with them, significant cash balances. They will be consuming that cash balance first. So the corporate credit essentially will come from the mid-corporate segment, may not be coming from the large corporates, and some of the central PSU spending on the capex for example refineries and all is also contributing to the corporate credit growth.

So we posted a credit growth of 7.1% in the current quarter which is eminently feasible to take to 10%. So this is what we are expecting and in terms of pipeline, more than 7 lakh crore pipeline is available. This is a combination of working capital under utilization and term loans sanctioned but under disbursement and term loans in the process of sanction. I think this is a good pipeline to have. The first credit demand obviously will come from the higher working capital utilization followed by the draws from the term loans which are already sanctioned and of course the ones which are going to be sanctioned. So there's a good visibility, it's only a matter of how they are spaced out which contributes to the growth rates.