SBI pegs FY13 growth at 18 pc

SBI pegs FY13 growth at 18 pc

 Despite offering lower interest rates in comparison to its peers, the State Bank of India (SBI) is facing sluggish loan growth due to an overall fall in demand and expects its credit portfolio to grow by up to 18 per cent in 2012-13.

“There is lack in loan demand by road and power sectors,” SBI’s newly-appointed Deputy Managing Director S B Nayar said on Saturday.

The bank, which has got overwhelming response in the home loan space due to its lowest interest rate, faces hurdles in credit offtake due to an overall slowdown in industrial activity, which according to analysts hope will pick up in the third and fourth quarters of the fiscal.

Nayar, however, said that in the corporate segment, ports and cement have shown an increase in demand. Loan demand for consumer goods has been robust, the bank has disbursed around Rs 7,000 crore home loans in the last two quarters (April-September).

Sources in the banking industry, however, said that the value of home loan applications has nearly trebled since August when the bank cut rates. So far, the SBI has disbursed around Rs 7,000 crore home loans in the last two quarters (April-September).

Earlier, SBI had cut auto and home loans by 50 basis points, while it later slashed its base rate by 25 bps to 9.75 per cent in September. It is now offering 10 per cent on home loans up to Rs 30 lakh while the rate of interest is 10.15 per cent for loans above Rs 30 lakh. It has also reduced its processing fees. At the end of July-September quarter, SBI's home loan portfolio stood at around Rs 1.12 lakh crore.