SBI's share in deposits, loans slumps

State Bank of India's market share dropped sharply in the nine months ended December 2006, as the country's largest bank struggled to match its competitors' growth rates.

A much slower accretion to deposits acted as an additional drag on the state-run bank's efforts at protecting its market share. The bank with 90 million customers lost about 1.5 percentage points in its market share in advances since March 2006.

The drop is significant considering the fact that it took almost 10 years for the bank's share in advances to fall from 20 per cent to nearly 18 per cent a couple of years ago.

SBI's market share in deposits shrank more sharply during the nine months, as it trailed almost all banks in deposit growth. While its year-on-year deposit growth was 11.17 per cent at the end of December 2006, private sector banks such as ICICI Bank and HDFC Bank enjoyed deposit growth of over 40 per cent. 

ON THE DECLINE
	Share in advances		Share in deposits
	5-Mar	6-Mar	5-Mar	6-Mar
State Bank of India	17.65	17.27	20.05	17.58
ICICI Bank	7.97	9.65	5.45	7.64
Canara Bank	5.27	5.24	5.29	5.40
Punjab National Bank	5.27	4.93	5.64	5.54
Bank of India	4.84	4.30	4.31	4.35
Bank of Baroda	3.78	3.95	4.44	4.33
Union Bank of India	3.50	3.52	3.38	3.43
IDBI Bank	3.96	3.48	0.83	1.20
Central Bank	2.38	2.47	3.32	3.08
UCO Bank	2.41	2.47	2.70	2.52

Although the bank's loss in market share has been compensated by gains by its seven associate banks, for the bank alarm bells have started ringing as it now sees a threat from private sector banks to the public sector monopoly in rural and semi-urban areas too.

SBI officials, who did not want to be named, said the bank's share in loans declined to 15.8 per cent with advances of Rs 3,09,434 crore and in deposits to 15.2 per cent at Rs 4,04,352 crore at the end of December 2006. The bank's share in deposits was more than 20 per cent 21 months ago.

However, a market matching performance by SBI's seven associate banks has nearly protected the group's share in advances as well as deposits at around 24.5 per cent, the officials said.

This means the share of SBI's associate banks in advances rose to over 8 per cent from 7.25 per cent at the end of March 2006 and in deposits to more than 9 per cent from 7.51 per cent.

The officials said SBI's strategies revolve around increasing the market share in both loans and deposits by 25 basis points every quarter to reach around 18 per cent over the next two-and-a-half years.

The fear of losing out in the rural markets, where private sector banks "� particularly ICICI Bank "� are spreading their wings fast, has made SBI Chairman O P Bhatt give a 'do or die' call to its employees in rural and semi-urban branches to tap depositors in over six lakh villages across the country.

With its market share inching closer to double digits, ICICI Bank is expected to be the country' only bank, besides SBI, to cross the 10 per cent mark by the end of this month.