State Bank of India (SBI) is expected to post credit growth above the industry average in 2024, with retail personal loans continuing to be the main growth driver.
SBI has predicted its domestic advances to grow 16.17% year-on-year (yoy) in fiscal year 24. It recorded 16.91% year-on-year growth in advances in the country by the end of December 2022.
Even if retail personal loans, up 18.10% y/y to end-December 2022, will continue to be the main driver of credit growth, SBI plans to focus more into manufacturing exports and regain its leadership in the SME segment, according to its business strategy for fiscal year 24.
Furthermore, the bank is expected to capitalize on the potential increase in the capital expenditure cycle (capex), giving it enough room to grow its corporate loan balance.
Also read: SBI launches new checking and savings accounts in 2024 to attract deposits
“Results-based engagement with businesses and their entire ecosystem should be a high priority. Furthermore, sunrise sectors such as EV (electric vehicle), lithium battery, green hydrogen, warehousing, defense, etc. are also expected to present good business opportunities that need to be exploited.
“These steps will also help increase ESG Dinesh Kumar Khara, Chairman, said the portfolio (environmental, social and governance) is now becoming important to all stakeholders.
Financial inclusion
In the agriculture and financial inclusion segment, SBI plans to target the affluent farmer segment and obtain a larger share of investment credit besides traditional products such as Kisan Credit Card, Cho self-help group loans, Agricultural Gold Loans, government-sponsored programs, among others.
“We should explore interacting with agritech and agribusiness to drive our credit growth and continue to support the Agriculture Industry.
“We are also working on an enhanced Agri Tech stack to provide a simplified end-to-end digital lending journey that improves referral process and convenience for customers,” said Khara. client.
Fee income
EQUAL capital investment in infrastructure projects increase in scale and infrastructure spending grew as expected in FY24, SBI saw a spike in bank guarantee fees.
“We should make sure to adopt a “Start-to-Deliver” model in infrastructure financing for fee-based income,” said the SBI director.
While the bank expects loan processing fees to increase with the overall growth of the loan, it plans to streamline the fee waiver and guarantee a valuation based on RAROC (Return on Percentage). risk-adjusted capital).
SBI plans to further increase distribution fee income by leveraging its large customer base and extensive distribution channel.
“Currently, our product/service per customer is 2.84. There is significant room to increase cross-selling income from both third parties as well as proprietary financial products.
“We can continue to work towards integrating the technology with third-party financial services to provide omnichannel services,” Khara said.
