The loan growth of State Bank of Hyderabad (SBH) is unlikely to cross 4-5% during the current financial year due to the large scale shedding of bulk loans by companies.
There has been a de-growth of around Rs 3,000 crore in bulk loans so far this year as big borrowers have been repaying loans to reduce the interest costs, Santanu Mukherjee, managing director of SBH said here today.
Lot of companies were going for market borrowings as an alternative to the high cost bank loans and therefore it was unlikely the scenario would be any different in the second half of this year in terms of credit off-take by big ticket borrowers, according to him.
"In fact it is hard to say how much growth in advances would we be able to register in the current year because we have no clear picture on where would this(shedding of bulk loans by the big borrowers ) stop,"he said.
Coupled with the de-growth in bulk loans and the bank's conscious effort to reduce the high cost deposits, the overall business of SBH remained the same at around Rs 2.4 lakh crore since march this year, according to Santanu Mukherjee.
Personal loans segment, which was growing at 20% the past couple of quarters was able to partly offset this loan de-growth as fresh retail advances stood at around Rs 1,500 crore in the past few months. Also they expect to disburse around Rs 2,500 crore loans to small and medium enterprises (SMEs) by October this year.
The bank's gross NPAs still remained high at 5.14% with fresh NPAs neutralising the effect of recoveries. "However, we want to reduce the gross NPAs to 4.5% by the end of the second half," the bank managing director said.
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