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Corporate Loan Growth To Reach Double Digits In FY26, Rs 7 Lakh Crore In Loans Lined Up: SBI Chairman
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With the economy picking up, SBI is seeing a clear rise in demand for corporate loans and expects this segment to grow by double digits
SBI
With the economy picking up, the State Bank of India (SBI) is seeing a clear rise in demand for corporate loans and expects this segment to grow by double digits over the next two quarters of the current financial year, according to the bank’s Chairman C S Setty. He said the bank has a strong pipeline for corporate loans, with about Rs 7 lakh crore in loan approvals, including unused working capital limits and term loans currently being disbursed. There are also several project loans under discussion.
Corporate credit, which had been slow for some time, saw a turnaround with 7.1 percent growth in Q2. He added that the bank expects corporate credit to grow in the lower double digits over the next two quarters, given the current pipeline.
As economic activity improves, working capital usage is also increasing each quarter. For term loans, those already approved and being disbursed are being drawn down, and new projects under discussion will keep the pipeline going.
The SBI Chairman also said the bank may not need to raise equity capital to support credit growth and aims to keep a capital adequacy ratio of 15 percent over the next 5-6 years. He said that even before the recent QIP, funding credit growth was not an issue, but the bank wanted to strengthen its capital ratios. The goal is to keep the CRAR at 15 percent and Common Equity Tier 1 at 12 percent. This level of capital allows the bank to fund advances over Rs 12 trillion.
With current profit levels, if profitability stays the same for 5-6 years, the bank may not need to raise more capital, at least for CET 1. In July this year, SBI raised Rs 25,000 crore through a qualified institutional placement (QIP), the largest ever in Indian capital markets. Earlier, the bank raised Rs 15,000 crore through QIP in June 2017.
For Tier II bonds, Setty said the bank raises funds periodically to replace maturing bonds, and this year it will raise another Rs 12,500 crore through such bonds. He is confident the bank will achieve its 3 percent net interest margin target, even if the Reserve Bank cuts the repo rate by 0.25 percent in the upcoming policy review.
He said the RBI’s decision next Friday will be a close call, but SBI expects a small rate cut of 0.25 percent. If there is a rate cut in December, it is expected to be shallow and should not have a big impact on margins.
Earlier this week, RBI Governor Sanjay Malhotra said there is room for a rate cut, as mentioned in the last policy in October. Recent statements and economic indicators have led to expectations of a rate cut in the upcoming Monetary Policy Committee meeting on December 5.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – PTI)
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
November 30, 2025, 13:59 IST
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