State Bank of India (SBI) is the largest bank in India with an asset size of Rs 20 lakh crore. It has the widest network of 16,300 branches, with dominant presence across India. It has subsidiaries in life insurance, asset management, credit cards and the capital market space, among others; besides five regional subsidiary banks.
SBI currently has a exposure of Rs 1.78 lakh crore in the power sector including conventional energy and discoms, which represents close to 10 per cent of the total loan portfolio. This is dangerously placed within the overall infrastructure portfolio.
SBI and JBIC´s credit line agreement
In September 2014, SBI and Japan Bank for International Cooperation (JBIC) signed a loan agreement to set up an export credit line. The loan is co-financed by the Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU), which brings the total co-financing amount to JPY 13.5 billion.
This credit line will be utilised by Meja Urja Nigam Private Limited (MUNPL) to finance the procurement of steam turbine generator equipments from the Japanese company and its subsidiary in India, to construct a super critical pressure coal-fired power plant (2x660 MW) in Meja (UP). MUNPL is a JV equally invested by NTPC Ltd and UPRVUN.
Asset quality improves; high restructuring
Gross NPAs and net NPAs declined by 8.5 per cent and 20 per cent Q-o-Q, respectively. Fresh slippages were lower by 32.3 per cent Q-o-Q, largely due control of stressed asset formation in the SME space, aided by lower slippages from mid-corporate, retail and agriculture segments.
While some stress was seen in the large corporate and overseas books, SBI reported fresh slippages of Rs 4,769 crore as compared to Rs 7,043 crore in Q3FY15, largely attributable to mid-corporate, large corporate, agriculture, retail and international loans which constituted around 97.8 per cent of the total slippages this quarter.
Restructuring during the quarter came in higher than expected, owing to the new restructuring norms. Standard restructured assets increased to 4.3 per cent of the loan book, of which 21.6 per cent has turned into NPAs till date.
SBI´s target is to grow their loan book at 13-14 per cent in FY16. Loan book growth, including sale of ARCs and substituted loans to CP/CDs would have been 10-11 per cent in FY15. Project pipeline is currently seen in renew able and hydro-carbon segments. In FY16, SBI´s disbursements to infrastructure is likely to be between Rs 13,000-14,000 crore.
The bank, in the month of February, has committed Rs 75,000 crore for generation of 15,000 MW of renewable energy in the next five years. However, SBI management has stated that the proposals will have to be viable as per their norms. The bank´s outstanding loans towards clean energy is to the tune of Rs 7,500 crore.
- Wind based power projects commissioned and electricity generated from these power SBI´s branches/offices in Maharashtra, Gujarat and Tamil Nadu.
- Initiated pilot projects to determine carbon footprint levels, which help determine the Bank´s resource consumption pattern and enables them to implement cost effective and sustainable measures.
- SBI has SMART i.e. Specific, Measurable, Achievable, Realistic and Time-bound ´green banking goals´, some of which have obtained a star rating at all local head office premises from the Bureau of Energy Efficiency.
||State Bank of India |
||Public Limited |
||Mumbai, India |
||Retail, Power, Infrastructure |
||Rs. 55,015 cr |
|Key financial parameters
||FY 2013-14 |
||Rs. 152,397 cr
||Rs. 136,351 cr |
|Net Interest Income
||Rs. 55,015 cr
||Rs. 49,283 cr |
||Rs. 77,591 cr
||Rs. 67,835 cr |
||Rs. 13,102 cr
||Rs. 10,891 cr |
||Rs. 23.9 |