SBI Chairman Dinesh Khara said that the bank’s net profit for the second quarter was impacted by a surge in provision for the likely salary and pension hike of its employees. The bank has been setting aside money for a likely salary revision effective from November 2022 and has so far provided a cumulative Rs 8,900 crore for the same.
Despite this, Khara said he expects the bank’s growth momentum to continue at 16-17% in the next fiscal, boosted by robust domestic demand and festival-linked spending.
SBI reported an 8% increase in net profit to Rs 14,330 crore for the July-September quarter of the current financial year. Growth in retail loans at 16% continued to outpace corporate loan growth which was at 7%.
Khara said that companies are slowly availing of loans and the bank is sitting on a Rs 4.77 lakh crore pipeline of loans awaiting sanctions and disbursals. He also said that the bank has a Rs 3.20 lakh crore of unsecured loans, of which 86% have been given to salaried customers working in secure government jobs, and there is no cause for concern.
RBI Governor Shaktikanta Das had recently expressed concern over the surge in unsecured credit growth of banks and NBFCs, and advised them to strengthen their internal surveillance mechanisms and take suitable safeguards.
