HYDERABAD: The State Bank of India (SBI), one of the largest public sector banks in the country, expects to become profitable by the end of the second quarter of the current financial year, said its chairman Rajnish Kumar in Hyderabad on Friday.
According to him, the bank is in the final stages of resolution of several stressed assets. Kumar said that a lot of provisioning was done in the fourth quarter of the previous financial year (FY18) and the first quarter of the current one (FY19), which was the reason behind the bank posting losses. SBI would see profit hopefully from September itself, he said.
“A lot of provisioning was done in the March as well as the June quarters. We have taken the entire provision in the first quarter alone, instead of distributing it over four quarters. The intent was to take those upfront, and start returning to profits from September onwards. So, hopefully, the bank would start seeing profits from next month itself. Even the resolution of several stressed assets of the power sector is in final stages,” Kumar told reporters.
“Non-performing Assets (NPA) from NCLT 1 and 2 alone account for around Rs 62,000 crore for the SBI. We are trying to resolve some power sector loans. The overall Gross NPA as well as Net NPA will come down. Our provision coverage ratio has been increasing every quarter,” the SBI chairman explained.
“The pressure on profits was largely due to higher provisions. As our provision requirements start coming down, we will automatically see profits. Also, interest rates seem to be stabilising and income from interests will go up this year. Our CASA deposits are very strong. All this will put us on the path of profits soon. While consumer-centric retail lending such as home loans, car loans and personal loans will be our main priority, we are also ready to lend large-ticket loans, since we have put our house in order. We are looking for some good lending opportunities to corporates,” he said, adding that cement, roads, gas, automotives, renewable energy, among others are now witnessing a positive momentum.
Kumar was in Hyderabad to participate in several activities, including distribution of cheques to MUDRA beneficiaries and launch of the bank’s CSR activities. He also added that bank might increase its CSR spending if it sees profits.
Mallya in no mood to settle dues
Replying to a query, SBI chairman Rajnish Kumar said that the bank has not received any communication yet from fugitive tycoon Vijay Mallya regarding settling of loans. He said the bank would respond with an open mind if any such proposal comes. The CBI had earlier this month filed a chargesheet on irregularilites related to J1,600 crore loan Mallya took from SBI.