SBI may go slow on hiring for 2-3 years

The bank added it was careful while lending to companies in the infrastructure and iron & steel sectors

State Bank of India, the country's largest lender, might go slow on recruitments in the next two-three years. A Krishna Kumar, managing director and group executive, said the bank would try to maintain its employee strength at current levels, even as it kept expansion programmes in mind. "We will see the extent of people retiring from the bank from all levels. So, to that extent, we might look at replenishing that stock. We will not try to increase. Right now, we have 223,000 people working with us."

By March this year, the employee strength might fall to 220,000, he said. "We will try to keep the figure between 220,000 and 223,000 through the next few years. By reducing the staff all of a sudden, other activity does not function effectively. But at the same time, I should not increase my staff so much that my productivity and expenses become issues," Kumar said.

According to the bank, between March and December 2013, its staff strength fell by about 5,000.

For the first nine months of this financial year, SBI recorded staff expenses of Rs 17,225 crore, 35 per cent more than in the year-ago period.

Earlier, an RBI report had said when it came to business and profit per employee, SBI ranked below the average. In 2012-13, the bank's business per employee was Rs 9.43 crore, compared with the average of Rs 12.13 crore.

The bank added it was careful while lending to companies in the infrastructure and iron & steel sectors. This is part of the bank's efforts to rein in bad loans, which rose about five per cent in the quarter ended December.

The bank is restructuring non-performing assets (NPAs) in a few cases.

Kumar said the bank's stressed assets management group had been tasked with covering NPAs worth at least Rs 1 crore. The group was formed last year, amid rising bad loans. The bank also has in place an early warning system to identify assets falling into the NPA category.

"In cases that are sticky even after restructuring, we opt for recovery through court notices and selling of assets backed by collaterals," he said.

Home loans outperform

By March, the bank expects its offtake in the housing loan segment to exceed Rs 1,42,000 crore, the highest in the banking sector. SBI's NPAs in this segment have fallen to one per cent from 1.2 per cent two months ago. In December 2013, exposure in this segment stood at Rs 1,35,000 crore.

"We're seeing good credit offtake for home loans, retail and agriculture, but the corporate segment remains comparatively weak," Kumar said.

Not averse to competition

With fresh bank licences to be awarded by the Reserve Bank of India soon, SBI said it always welcomed competition and would continue to do so. "Our business started doing better after the entry of new players in the 90s. The new banks showed us the benefits of core banking, which were not known to us then," Kumar said.

Kumar said SBI was awaiting RBI's decision on charging customers for using the automated teller machines of other banks. He said ATM operations broke-even only after 100-125 transactions a day, adding SBI-owned ATMs recorded 225-250 hits a day across the country.

On the bifurcation of Andhra Pradesh, he said the bank was considering setting up new states here to enhance lending.