SBI’s NBFC loan purchases at just Rs 17,000 crore so far, unlikely to meet full-year target

State Bank of India (SBI) has bought loan pools worth only about Rs 17,000 crore so far in FY19 from non-banking financial companies (NBFCs), against the stated target of Rs 45,000 crore, sources told FE.

There are not too many good asset pools up for sale, and SBI is unlikely to meet its revised full-year target, according to executives in the know.

“We have very selectively bought portfolios in the housing, agri and MSME (micro, small and medium enterprises) categories. There simply aren’t too many assets good enough for us to buy,” said a senior banker.

In a call with analysts after SBI’s Q3FY19 results, the bank’s management had said it had made portfolio buy-outs worth `11,000 crore during the December quarter, of which `8,700 crore were housing loans and `2,500 crore were microfinance institution (MFI) loans.

Chairman Rajnish Kumar had said the direct exposure was being taken only in NBFCs that were either state-owned or had been in the market for long.

The bank has divided the NBFC universe into four categories. The first consists of Power Finance Corporation (PFC) and REC. In the second category fall LIC Housing Finance, Housing Development Finance Corp (HDFC), CanFin Homes and PNB Housing Finance. The likes of Cholamandalam Investment and Finance Company, Bajaj Finance and Sundaram Finance fall in the third category.

“Fourth category is where mostly I would call them first-generation entrepreneurs. There our credit would not have increased,” Kumar told analysts.

State Bank of India