Improving macro environment to resolve asset quality issues: SBI

Mumbai :  State Bank of India’s asset quality issues should be resolved as the macroeconomic environment improves, Chairman Arundhati Bhattacharya said in a speech to shareholders at the bank’s 59th annual general meeting.

“We believe that the improvement in macroeconomic environment and expected revival in economic growth will help mitigate risks and resolve problems of asset quality,” Bhattacharya said. She restated that the bank would continue to focus on reducing non-performing assets, raise income from other sources and keep costs under control.

SBI will also continue to focus on risk management while improving customer service and leveraging technology, she said. Optimistic about the new and stable government, Bhattacharya said she sees a better growth momentum and expects a “clear revival” in the investment climate.

She said the Union budget on Jul 10 is “expected to give a clear indication to the market.”

“Higher spending in infrastructure, speedy implementation of projects, and continuation of reforms will provide further impetus to growth,” she said.

SBI has a capital adequacy ratio of 12.44% as on Mar 31. It raised 80.32 bln rupees through qualified institutional placement, 20 bln rupees from the government, and another 20 bln rupees from Tier-II bonds in FY14. Bhattacharya said she expects similar capital support from the government as well as from markets in the future.

“Once things come to normalcy, that is economy improves, asset quality improves, provision requirement reduces and profitability increases; endeavour of your bank would be to plough back profit and supplement capital requirement through internal resources rather than going to the exchequer or markets for ongoing capital requirements,” Bhattacharya said. Bhattacharya said that the bank would target 46% current and savings account ratio in FY15.

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal

www.freepressjournal.in