‘Top cos, SMEs not doing that badly’ Kolkata: Corporate India is not doing as badly as is being perceived widely, feels SBI chairman Arundhati Bhattacharya. In an exclusive interview, the first woman head of the country’s largest lender told TOI that there is not much stress on large corporate assets and the small and medium enterprises (SMEs) sector is doing rather better than anybody anticipated. She is also optimistic that the steel sector, which had gone through a bad phase and experienced a series of corporate debt restructuring (CDR) exercises, may be on a rebound as it has got back pricing power following depreciation of the rupee. However, she said, “There are no new proposals coming from power because of the coal linkage issue.” According to her, the situation is bad only in mid-corporate and large SME segments. “Other sectors are also doing well. Retail business is doing well, too. The demand in agriculture is quite good. Serviceoriented SMEs like small law firms, beauty parlours, event managers, fashion firms, catering, IT-enabled services (ITeS) are doing really well,” she said. Commenting on large corporates, she added that as of now there is not much fresh demand but there is not much stress either. Bhattacharya pointed out that the main problem is in the mid-corporate segment. “They do not have deep pockets, cannot extend working capital cycles and are not getting equity. It is difficult for them to get investors as well. Another major problem for them is they do not have much non-core assets,” she added. Mid-corporate and large SME segments account for more than 66% of SBI’s stressed assets. Mid-corporates account for 18% of the bank’s loan book. Bhattacharya said the country’s largest lender is considering sale of non-performing assets (NPAs) to asset-restructuring companies (ARCs) this quarter. “This is the first time we would be selling NPAs to ARCs,” she said. SBI’s gross NPA ratio in the October-December quarter rose to 5.73% from 5.30% a year ago, and 5.64% in the previous July-September quarter. The bank’s net bad loans ratio increased to 3.24% from 2.59% a year ago. Commenting on the housing loan arena, Bhattacharya added that it is looking at 20% growth in the sector for the next few months. “The overall growth in loan book would be a modest 14% but housing and auto are doing well. There is 25% growth in auto loans as well. More than 20% of housing loan disbursement is now to women customers through the special scheme.” Udit Prasanna Mukherji TNN TOI140312
Posted on: Wed, 12 Mar 2014 10:51:20 +0000
Trending Topics
Recently Viewed Topics
© 2015