Home Loan Demand Soars: SBI’s Mortgage Portfolio Exceeds Rs 9 Lakh Crore Amid RAM-Led Growth
State Bank of India (SBI) has achieved a significant milestone, with its mortgage loan book surpassing the Rs 9 lakh crore mark in November. This growth is largely attributed to strong performance in the retail, agriculture, and micro, small, and medium enterprises (MSME) sectors. Chairman C S Setty announced that the bank has revised its credit growth forecast for the current financial year from 12% to 14%, reflecting a robust demand in these segments.
Growth in Retail, Agriculture, and MSME Sectors
The RAM (Retail, Agriculture, and MSME) portfolio, which constitutes approximately 67% of SBI’s total loan book, crossed Rs 25 lakh crore in September. Setty highlighted that the bank is witnessing impressive growth rates, particularly in the MSME sector, which is expanding at nearly 17-18%. Meanwhile, the agriculture and retail sectors are experiencing growth rates around 14%. This upward trend in credit demand is a positive indicator of improving economic activity across the country. Setty expressed confidence in the bank’s ability to sustain this growth trajectory, emphasizing the importance of these segments in driving overall credit expansion.
Corporate Credit and Interest Rates
While corporate credit had previously shown signs of stagnation, recent data indicates a revival, with a 7.1% growth recorded in the second quarter. Setty noted that the bank anticipates corporate credit growth to remain in the lower double-digit range. The recent decision by the Reserve Bank of India to reduce the repo rate by 25 basis points to 5.25% is expected to further stimulate borrowing. This rate cut, the first in six months, coincides with a notable economic growth rate of 8.2% in the July-September quarter of FY26, which should bolster demand for new loans.
Capital Requirements and Future Projections
Regarding capital requirements, Setty indicated that SBI may not need additional equity capital to support growth over the next five to six years. He reassured stakeholders that the bank’s capacity to fund credit growth has not been an issue. SBI aims to maintain a Capital to Risk-weighted Assets Ratio (CRAR) of 15% and a Common Equity Tier 1 (CET 1) ratio of 12%. With current profitability levels, Setty believes that the bank can sustain its growth without the need for further capital raising, particularly concerning the CET 1 ratio.
Outlook for Net Interest Margin
Despite the recent repo rate cut, Setty remains optimistic about achieving the bank’s net interest margin (NIM) guidance of around 3%. This outlook reflects the bank’s confidence in its operational efficiency and profitability. As SBI continues to navigate the evolving economic landscape, its focus on maintaining strong capital ratios and fostering growth in key lending segments positions it well for future success.
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