SBI Cuts FY25 Deposit Growth Guidance To 10–11%

State Bank of India has cut its deposit growth guidance for the current financial year to 10–11% from its previous guidance of 12–13%, Chairman CS Setty said on Friday.

The state-owned bank expects credit growth to be 14–16% in the current fiscal. Setty wants the bank's deposits to grow in double digits in the fiscal and said deposit rates seemed to have peaked.

The bank is trying to contain the cost of deposits and is focusing on retail term deposits, which are less expensive than bulk, he said in a post-earnings conference.

For the quarter ended September, gross advances grew at a healthy pace of 15% on year and 2.9% on quarter to Rs 39.2 lakh crore and deposits clocked 9% on year growth and 4.4% on quarter to Rs 51.2 lakh crore.

While the cut in deposit growth guidance has not come as a surprise since overall deposit mobilisation remains a challenge for the banking industry, what is a relief is that the bank's credit-to-deposit ratio at 67% remains healthy.

Within loan growth, Setty said that growth in its corporate book is showing good visibility and the bank has proposals under sanction of at Rs 6 lakh crore. He expects corporate loan growth to continue at 17-18% on year.

During Jul-Sep, domestic corporate book grew the highest over 18% on-year to Rs 11.6 lakh crore, followed by retail personal loans at over 12% on-year to Rs 13.96 lakh crore.

On retail loans, which have been the talk of the town for some time now, Setty said that SBI is going slower on unsecured retail and this is not because of any concerns around asset quality but mainly on account of lower demand.

"Our unsecured book has a very good quality," he said, adding that the bank is witnessing a comeback in unsecured loan demand since this festive season. He expects growth levels in this segment to rise by the end of the year.

Amid rising concerns over exposure to microfinance institutions because of overleveraging of borrowers taking place on ground, the bank's exposure to the MFI segment remains miniscule at about Rs 10,000-11,000 crore.

Speaking about fundraising, the bank intends to tap the debt market with infrastructure bonds as there is sizeable interest from investors. SBI is likely to use the bond market to raise up to Rs 20,000 crore through infrastructure bonds.

So far in the current financial year, SBI has already raised Rs 20,000 crore through two tranches of infrastructure bonds.

The bank will examine fundraising by way of equity if needed but there are no plans on the same currently, he added.