Thought leadership: With a good quarter and improved asset quality, the outlook for loan growth is positive asserts SBI Chairman – Dinesh Kumar Khara

India’s biggest commercial bank, State Bank of India (SBI) declared its performance for the quarter and year ended on March 31, 2022, on Friday.

The Net Profit of the bank increased by 41.28% YoY in Q4FY22 and stood at Rs 9,114 crore as against Rs 6,451 crore a year ago. Post covid recovery has been strong, with SBI giving record-breaking quarterly profit, back-to-back. It was a historical quarter for SBI as the retail personal portfolio crossed Rs 10 lakh crore during this period.

At the helm of the biggest bank in India, Dinesh Kumar Khara attributes the robust performance to the pickup in the loan book post covid, proactive measures taken by the bank to improve the asset quality which has led to lower provisioning requirements and improved NPA ratios.

Dinesh Kumar Khara, with his experience of 33 years in SBI, was appointed the Chairman in October 2020, in place of retiring SBI head, Rajnish Kumar. The appointment came at the most inopportune time when the financial sector was trapped in the Covid crisis with a stressed loan book.

The recent recovery seen in SBI’s profitability and asset quality bears testimony to his financial acumen, rich experience and commitment. His outlook for future growth is targeted at achieving a 15% ROE by 2024. Given that ROE for the bank stood at 13.92%, up by 398 bps YoY during the quarter ended March 31, 2022, the target is not far-fetched.

Khara’s confidence is backed by the strong growth in infrastructure with the bank currently having Rs 4.6 lakh crore of proposals in the corporate loan segment. In the retail space, the loans through repriced with the hike in MCLR rate is not expected to hamper the demand given the salaries getting back to pre-Covid levels, keeping the EMI to NIM(Net Monthly Income) ratio well in the acceptable range.

With half of the three years tenure as Chairman of SBI remaining, Khara is expected to lead the bank to new heights.