SBI raises loan growth guidance to 13-15% on trade deals, Budget impetus

Mumbai: India’s largest lender State Bank of India (SBI) on Saturday raised its FY26 loan growth forecast by 100 basis points to 13-15%, following trade deals and announcements in the last Union Budget.

“I see many areas where SBI is well positioned to benefit from the emerging scenario,” SBI chairman CS Setty told reporters after announcing the bank’s December quarter results.

Setty said trade deals would benefit not only corporations but also many small businesses.

India and the US on Saturday agreed on an interim trade framework that will advance ongoing bilateral trade agreement (BTA) talks.

While India has signed trade agreements with the UK and Oman so far, the trade agreement with the European Free Trade Association (EFTA) came into force on October 1. Apart from that, New Zealand and European Union has been concluded.

The bank is witnessing a recovery in corporate credit growth, fueled by sectors such as oil and gas, infrastructure and metals, major non-bank financiers and energy, among others. Corporate loans now make up just over 33% of its total book.

SBI’s loans to corporates increased by 13.4% in the three months to December; Although this was below the overall credit growth of 15.1%, it was above the 7.1% growth witnessed in the September quarter. Setty said the bank was seeing a “strong recovery in corporate credit growth.”

Total loans of the bank ₹46.8 trillion as of December 31.

Ashwini Kumar Tewari, deputy and one of the managing directors of SBI, said the bank has a strong corporate credit pipeline. These include loans that were approved but not used or used. As of December 31, the pipeline is currently at a standstill. ₹7.9 trillion.

“Economic activity has really picked up after GST rationalisation, leading to working capital utilization. We are seeing several sectors where long-term loans are available and there is good pipeline visibility,” Setty said.

The bank also saw an increase in the share of top-rated borrowers, or AAA-rated borrowers, in its corporate loan book to 44%, compared to 40% in the same period last year.

Setty said the bank was not pursuing growth at the expense of margins. He said the bank was “not compromising on margins” to grow its book and maintained its previous margin outlook of above 3%. Setty said SBI is not in the game or competition of growing the book at any cost.

Domestic net interest margins, an important indicator of profitability, increased by 3 basis points (bps) compared to the previous quarter and stood at 3.12%. The bank’s net interest income remained in February ₹45,190 crore, an increase of 9% compared to the same period last year.

SBI’s credit growth in the December quarter was steady and not limited to any particular sector. While personal loans grew by 15 percent, agricultural loans and small businesses increased by 16.6% and 21% respectively.

“We want to grow in every area, and our approach will be to see every segment and every sector grow at a reasonable level,” Setty said.

As credit growth accelerates and deposits still lag behind, Setty pointed out that households’ savings patterns have undergone a structural change from bank deposits to areas such as investment funds.

“Structurally, we need to relook at our balance sheet composition,” Setty said, referring to the emerging situation for the broader banking sector. “Banks will be able to access (the market) bonds at least equivalent to the cost of deposits, if not lower than deposits, and this will provide banks with ease and flexibility in structuring their balance sheets.”

Setty said SBI plans to enter the bond market in FY27. The bank’s deposits increased by 9 percent compared to the previous year ₹57 trillion, and Setty has refrained from giving any guidance on how it will perform later this year.

on saturday, The bank announced net profit related to ₹21,028 crore in the three months to December, beating analyst estimates, up 24.5% from the same period last year.

SBI’s profit announcement was expected ₹17,810 crore in the third quarter of the fiscal year, according to consensus estimates from a Bloomberg analyst survey.

Other income increased by 66% ₹Interest income rose 4.4% to Rs 18,359 crore. ₹1.2 trillion. The bank also received a document. ₹2,200 crore dividend from asset management arm SBI Funds To manage. The bank’s asset quality also saw an improvement in the December quarter; Gross bad loans decreased by 16 basis points compared to the previous quarter and constituted 1.57% of total loans.