State Bank of India (SBI) is well placed in terms of growth capital, stated its chairman Dinesh Kumar Khara. He further added the bank will explore opportunities for lending in promising sectors to diversify the portfolio and curb risk.
While addressing the bank's shareholders at the 66th annual general meeting held virtually, he added, "Opportunities for lending in promising sectors will be explored to diversify the portfolio and contain risk. In conclusion, the Bank adjusted to the challenges posed by the COVID-19 pandemic and is better positioned to tackle any subsequent wave. I am cautiously optimistic that the performance trajectory of FY2021 will continue in FY2022 as well."
Khara added that despite COVID-19 pandemic, the bank was able to function against all odds with minimal disruption for the customers. He added, "FY2021 was an exceptionally challenging year for the entire world. Despite this, your bank was able to function against all odds with minimal disruption for the customers."
He added the business continuity plans that were chalked out worked in the favour of the bank and this is proven by the bank’s performance in FY 2021. "Notably, the Bank has achieved high level of digitisation with share of Alternate Channels in total transactions increasing to 93 per cent in FY2021, thereby converting a challenging situation into an opportunity."
During the financial year ended March 31, 2021, the bank reported the highest-ever standalone net profit of Rs 20,410 crore against a net profit of Rs 14,488 crore in the previous year.
The gross NPAs ratio declined to 4.98 per cent in FY21 from 6.15 per cent in the last year. The PCR (provisioning coverage ratio) also improved to 87.75 per cent.
Khara said the business continuity plans that were chalked out have worked well for the bank, and it was reflected in various parameters of the consolidated financial statements as of March 2021.
He said the current financial year 2021-22 has begun with an unexpected second wave of COVID-19 infections.
Although the containment strategy this time included avoiding complete lockdown and managing the situation through micro-containment zones, the impact on the economy will nevertheless, be felt, he said.
In the current financial year, Khara said the bank will continue to accelerate its digital agenda. The scope and the reach of YONO will be expanded further.
"With the roll-out of pre-packaged insolvency for resolution, resumption of courts and formation of the National Asset Reconstruction Company (NARCL), efforts will be in full force to keep the momentum in stressed asset recovery in the current financial year," Khara informed the shareholders.
He said the bank is committed to creating an environment of increased risk awareness at all levels. It also aims at constantly upgrading controls and security measures, including cybersecurity measures, to ensure the mitigation of various risks.
Khara said the lender has been tracking the credit portfolio very closely during the current pandemic. The internal control mechanism of the bank has also been strengthened, wherever required.
With the current capital adequacy ratio at around 13.74 per cent, the bank is fairly comfortable on the capital front.
"We are expecting about nine per cent credit growth and we are well equipped to take care of this kind of credit growth," Khara later said while answering shareholders' questions.
He said that currently, the bank has 406 loss-making branches and it has made an appropriate action plan to revive them.
During the year, the bank wrote off Rs 34,000 crore of loans, he said.
Khara added that despite the second wave of COVID-19, the country's economy is poised for a recovery in FY2022.
