SBI chairman Arundhati Bhattacharya sees 'achche din' this fiscal

Arundhati Bhattacharya, chairman, State Bank of India (SBI), assured shareholders that the current financial year is expected to be more promising than the previous year as a stable political establishment is turning the economic tide for the better in the country.

In a message to the shareholders in the bank's annual report, she said, "This is mainly because 2014 general elections produced a very stable political environment on the plank of commitment to growth. The federal polity is trying for better synergy, and in such an environment 2015-16 is expected to be more promising than the previous year. The general economic condition began showing some signs of improvement during the second half of the financial year 2014-15. This had a favourable impact on the asset quality, which improved during the financial year."

The federal polity, she said, is trying for better synergy and such an environment which will act as a catalyst along with the enabling economic environment and bring the desired results.

"In October 2013, when I took charge as chairman, I had set six strategic goals for SBI. These were: NPA reduction, risk management, cost control, improving delivery standards, non-interest income and leveraging technology. As I look back today, tangible progress has been made on all the six fronts. Risk due to NPA has been contained against all odds."

SBI's gross non-performing assets (GNPA) and the net NPA declined 0.70% and 0.45%, respectively, in 2014-15. In absolute figures, the net NPA declined Rs 3,505 crore to Rs 27,591 crore by March 2015. Recoveries under NPA accounts increased 32.33% to Rs 4,485 crore, while the recoveries under the written-off accounts also registered a robust growth of 35.51% during 2014-15.

The bank has renewed its national level tie-up with Shriram Automal India Ltd to support branches in auction of seized tractors to reduce agri NPAs. Gold loan auctions are carried out on fixed dates each month to drive nil NPA position in agri gold loans.

The credit risk management department studies 37 industries in sectors such as telecom, power, coal, aviation, NBFC, textile, iron and steel covering approximately 85% of the banks' credit exposures.

"Your bank has strong credit appraisal and risk assessment practices in place for identification, measurement, monitoring and control of the credit risk exposures. The bank uses internal credit risk assessment models and score cards for assessing credit risk under different exposure segments. Internal ratings of the bank are subject to comprehensive rating validation framework. RBI has also allowed the bank for an internal ratings for assessing credit risk," she said.

Total assets of the bank increased 14.24% from Rs 17,92,748.29 crore at end of March, 2014 to Rs 20,48,079.80 crore as at end of March, 2015. During the period, the loan portfolio rose 7.46%, from Rs 12,09,828.72 crore to Rs 13,00,026.39 crore. Investments increased 24.13% from Rs 3,98,799.57 crore to Rs 4,95,027.40 crore as at end of March, 2015, with a major portion being deployed in government securities in the domestic market.