State Bank of India has grown only around 1% this time but the number is over Rs 17,000 crore. How should one look at it?
Dinesh Kumar Khara: The growth has to be seen in the context of the profitability also. Considering the overall macro environment, I feel quite satisfied with this number. Yes, of course, it is our effort to always put in our best and try and see how best we can improve on even these numbers.
Loan loss provisions have been elevated both YoY as well as QoQ. It is up 70% year on year and 37% QoQ. Why is it so?
Dinesh Kumar Khara: When it comes to loan loss provisions, it would be better if we compare it on a YoY basis because maybe at the year-end, there is a situation where whatever recoveries have happened during the year get appropriated and that is the reason why these numbers look quite depressed at the end of the year.
But having said that, in this particular case, we have to see that there is provision, and since our loan book is growing. That is the reason why we have grown almost about 15.5% as far as our loan book is concerned on a YoY basis, so that is one of the reasons why the provisions have also gone up.
The other small aberration was seen in terms of unsecured credit, particularly our express credit. In some of the states, there was a delay in payment of the salaries and that is the reason why we had seen some kind of elevated numbers in our unsecured loan book.
Having said that, I must also mention that out of the Rs 7,900 crore worth of provisioning made, about Rs 1,600 plus crore have already been recovered between 30th June and now. So, it is an ongoing process. There are no reasons to be alarmed about this number and things are within control. We are hopeful of demonstrating a similar kind of trajectory which we have demonstrated in the previous years going forward also.How much of the factor has been seasonality in this quarter?
Dinesh Kumar Khara: When it comes to agriculture, we invariably get to see some kind of seasonality. Whatever recoveries are being made, we will start from almost ground zero and that is the reason why we compare only YoY particularly when it comes to the first quarter. So, that is the seasonality effect, that is the reason why we do that.In terms of credit growth, corporate credit growth is up over 15%. Will this momentum continue this year and there will be more growth on the corporate side?
Dinesh Kumar Khara: I hope to see this coming through, particularly the kind of focus that is there on PLI, the kind of focus which is there on manufacturing. On top of it, we have got the pipeline which is as strong as about 4.6 trillion, so that is something that gives me hope that we will get to see decent traction in the corporate book and particularly the mid-corporate book.
Considering the run rate which you are in, do you foresee any reason for a change in guidance of this particular year?
Dinesh Kumar Khara: We expect that the economy should be growing at about 7.5% and 4-4.5% is the expected inflation. That brings the growth to about 13% and we normally grow about 2-3% more than that. So, on that particular count, I expect our loan book should be growing at the rate of 15-16%.
Although on QoQ basis there is some dip in NIMs, you have been able to consistently maintain over 3.2%. That was also the guidance you gave last time. What is the bank’s strategy – that you want to grow but not at the cost of profitability?
Dinesh Kumar Khara: We want to grow. We have to balance multiple factors. We have to balance the interests of multiple stakeholders. And obviously, the very important stakeholders are our shareholders. So, we have to create value for them and that is the reason why our effort is always to grow but not at the cost of our profitability.
Coming to SBI profitability, the net profit was Rs 1.63 trillion overall; before that it was Rs 1.46 trillion. What is the unfinished agenda that Dinesh Kumar still has?
Dinesh Kumar Khara: My ambition was to see that this bank generate a profit after tax of one trillion. To my mind, we are on track and hopefully we should get to see that number soon.