SBI Shifts Focus to Quality, Anticipates 13-14% YOY Credit Growth

In a recent strategic shift, the State Bank of India (SBI) is prioritizing quality over quantity, as stated by SBI Chairman Dinesh Khara during a conversation with ICICI Securities. This indicates a notable change from the bank’s previous focus on top-line growth, now emphasizing Return on Risk-Weighted Assets (RoRWA) as part of branch Key Result Areas (KRAs).

SBI, a key player in the banking sector, is forecasting a strong year-on-year credit growth of 13-14%, although this may be slightly counterbalanced by a decline in deposit growth, potentially increasing the credit-deposit ratio. The bank remains positive about its growth opportunities in the Small and Medium Enterprises (SME) and retail sectors, despite the competitive landscape.

The bank’s Net Interest Margin (NIM) is expected to hold steady or see a minor quarter-on-quarter reduction. SBI aims to reduce its Agriculture Gross Non-Performing Assets (Agri GNPAs) to single-digit figures, aligning with its record of consistent earnings per share growth, reflecting strong financial health.

Regarding capital management, SBI intends to utilize internal accruals to enhance its capital base. This approach demonstrates the bank’s commitment to returning value to its shareholders.

Despite these strategic adjustments, ICICI Securities continues to recommend a ‘BUY’ for SBI stocks, maintaining a target price of INR 730. This outlook is supported by real-time metrics indicating a market capitalization of approximately 100.72 million USD and a revenue growth of 5.67% for the last twelve months. Additionally, SBI’s stock has been trading close to its 52-week high, and analysts expect the bank to remain profitable this year.

This article was generated with AI support and reviewed by an editor.