SBI Chairman Dismisses Asset Quality Concerns, Maintains 14-15% Credit Growth

State Bank of India (SBI) Chairman CS Setty has dismissed concerns over a sequential deterioration in the lender’s asset quality, citing seasonal patterns in banking as a reason for quarterly fluctuations.

Setty made these comments at SBI’s recent financial results press conference, where he advised against drawing conclusions from first-quarter figures alone. The bank’s gross non-performing assets (GNPAs) rose to ₹74,273 crore, and slippages stood at 0.57% in the first quarter.

However, Setty pointed out that the first quarter is typically different from the remaining quarters in terms of business activity, yields, and credit expansion. He noted that lending and other banking parameters generally strengthen during the second, third, and fourth quarters.

According to Setty, the bank’s performance shows a meaningful improvement when compared with the same period last year. Recoveries and upgrades during the quarter also reduced stress by around ₹4,900 crore, indicating that there was no significant deterioration in the overall portfolio.

Setty also rejected concerns that rapid growth in agricultural and SME lending could result in higher defaults. Agriculture advances increased 25.43%, while SME loans grew 22.33%. He maintained that these areas represent relatively strong-quality portfolios and that overall risks remain under control.

The SBI chief attributed the bank’s SME expansion to loans under the Emergency Credit Line Guarantee Scheme (ECLGS), while agricultural growth is coming from institutional finance, investment credit, and other structured lending segments.

SBI has retained its full-year credit growth guidance of 14-15%, supported by demand across retail, corporate, and MSME segments. Deposit growth is expected to remain in the 10-11% range, helped by healthy retail current account savings account (CASA) growth.

The bank’s confidence in its performance is also reflected in its recent fundraising efforts, where it raised ₹4,691 crore through AT-1 bonds to support business growth.

In conclusion, SBI Chairman CS Setty’s comments suggest that the bank is well-positioned to achieve its credit growth targets, despite some concerns over asset quality. The bank’s strong performance in the previous year and its ability to manage risks effectively are expected to drive its growth in the current financial year.