SBI share price trades in the green: Chairman says ₹7 lakh crore credit in pipeline; corporate loan growth to hit double digits in FY26

The stock was up at ₹985.20, up 6.20 points, or 0.63%.

As far as the pipeline for corporate credit is concerned, he said, "The bank has a strong pipeline. We have about ₹7 lakh crore in loan sanctions, a mix of unutilised working capital limits and term loans that are currently under disbursement."

So, the corporate credit, which was lagging for quite some time, witnessed a turnaround with 7.1% growth in Q2, the chairman said, adding, "Our guidance on the corporate credit would be the lower double digit in the two quarters with the available pipeline."

Improving economic activity is also pushing up working capital utilisation, which is becoming stronger with each passing quarter, the chairman of the country's largest lender said.

With regard to term loans, Shetty said the ones already approved and under disbursement are being drawn, and the third category, where projects are under discussion, will create that replacement pipeline.

The SBI chairman also said that the bank may not need equity capital to drive credit growth and maintain a capital adequacy ratio of 15% over 5-6 years.

"Even before this QIP was raised, our ability to fund credit growth has never been a problem. We wanted to strengthen the capital ratios, so we have. Our long-term strategy is to maintain CRAR at 15% and Common Equity Tier 1 at 12%," the chairman said.

This kind of Capital to Risk Asset Ratio (CRAR) gives the bank the ability to fund advances over ₹12 trillion, Shetty said.

"With a profit rate like what we have today, if the same profitability is maintained for another 5-6 years, we may not require any capital raising, at least on the CET 1 part," the chairman said.

SBI fundraising via QIP

SBI in July this year raised ₹25,000 crore through a qualified institutional placement (QIP) of its equity shares, making it the largest QIP executed in Indian capital markets. Before this, the bank had raised ₹15,000 crore in equity capital again from QIP in June 2017.

Fundraising via bonds

As far as fundraising from Tier II bonds is concerned, Setty said, the bank does it periodically to replace maturing papers, and this year the bank would be raising another ₹12,500 crore through such bonds.

SBI: NIM guidance

Expressing confidence in achieving its 3% net interest margin (NIM) guidance, Shetty said it will be done even if the Reserve Bank decides to cut the repo rate by 0.25% in the upcoming monetary policy review.

Highlighting that the RBI decision next Friday will be a "close call", he said the house view at SBI is pointing towards a shallow cut of 0.25%.

"...if a December rate cut is there, but our house view again is that it would be a shallow rate cut of 0.25%, so it may not have any significant impact on the margins," Shetty said.

Earlier this week, RBI Governor Sanjay Malhotra said that there is a space for a rate cut, and it was mentioned in the last bimonthly policy in October.

The recent statement and macroeconomic indicators have triggered widespread expectations of a rate cut in the upcoming Monetary Policy Committee decision on December 5.