Mumbai: This financial year, FY20, will be a turning point for State Bank of India (SBI) as the bank will direct its efforts to achieve a more sustainable mix of business, domestically and in overseas operations, chairman Rajnish Kumar wrote to shareholders in SBI’s FY19 annual report.
“Taking cues from the last year, the bank has set the goal to achieve a healthy credit growth of 10-12% in FY20. To an extent the credit revival and recoveries in FY19 have already set the tone and the bank is confident of achieving the target set for FY20," said Rajnish.
He added that it was envisaged last year that growth in business will be achieved by portfolio re-ordering to reduce the credit risk-weighted assets (RWA) to total advances ratio and internal reorganisation of the corporate banking. “My message this year highlights the progress in the revival strategy," he said.
According to Kumar, a sustainable recovery is not just a mechanical arithmetic but it also requires deep structural transformation and strategic shifts in portfolio. Such an exercise, he said, should ultimately improve the return on asset (RoA), minimise asset liability mismatches and reduce the payback period of our investments.
“Accordingly, our transformation strategy going forward will continue to focus predominantly on five areas: customer service, corporate credit revamp, digitisation of banking operations, synergy between subsidiaries and development of our human resource," said Kumar.
The use of technology in delivering banking services has become more broad-based, he said. “The bank is already in leadership position in digital channels, ATMs and mobile banking. Asset and liability side product offerings through the YONO platform will be scaled up. Encouraged by successful implementation of e-DFS, our dealer finance scheme, we shall try more technology enabled products for our esteemed corporate clients," he added.
Kumar said that since the bank already has a large customer base in every business segment and therefore the benefits of retaining the existing customer base far outweigh the cost of acquiring new.
“Accordingly, in the coming year the bank will roll out revised customer satisfaction measures to gauge customer satisfaction. Our unique training programme - ‘Nayi Disha- Phase 2’, will be focusing on a customer-centric approach for employees, thus linking our human resource training with customer service," he said.
Moreover, since the corporate credit area of the bank attracted considerable attention in the last two years, the bank has started revamping of corporate credit structure and system within the bank on lines that will widen the universe of clients and focus on new segments.
“Strengthening of credit processes and increased product penetration across high priority relationships has been and will be our guiding principle going forward," said Kumar, adding that deficiencies in human resource, if any, will be mitigated and human resources will be strengthened by on-boarding sector specialists.
SBI posted a profit of ₹838.40 crore for the fourth quarter of FY19, missing analysts’ estimates after making hefty provisions to pare bad debt. In the corresponding quarter last year, the bank had posted losses of ₹7,718.17 crore.