SBI received restructuring requests for over ₹6,000 crore in October — expects that to more than double over the next three months

• The State Bank of India (SBI) has received ₹6,493 in restructuring requests as of October 31.
• India’s largest lender has estimated that this could double over the next three months.
• For the whole year, SBI pegs its slippages to be around ₹60,000 crore, which only accounts for about 2.5% of their overall loan portfolio.

India’s largest lender is the first to reveal its restructuring numbers. At the end of October, it had received ₹6,493 crore in restructuring requests. Over the next three months, by the end of December, the State Bank of India (SBI) estimates the restructuring amount could more than double to hit ₹13,000.

“Any iota of doubt we have captured it within this ₹13,000 crore number. There is a likelihood that it may not be as high,” said SBI’s newly appointed Chairman Dinesh Kumar Khara.


So far this year, the bank has reported slippages of ₹6,393 crore. Its pro forma slippages in the second quarter amounted to ₹14,386 crore. This figure would have been reported as slippages if not for the Supreme Court order to not declare any accounts as non-performing assets (NPA) after August 31.

“Out of this ₹14,000 crore, which we are saying is the likely slippage in Q2, we have pulled back for almost ₹6,000 crore as of October 31,” added Khara.

Forecasting another ₹20,000 crore in defaults during the second half, SBI’s overall outlook for the year is around ₹60,000 in slippages. Even so, the slippage ratio — including restructuring — will be at around 2.5%, which is only half as bad as what the Reserve Bank of India’s (RBI) financial stability report estimated back in August.

Most of the restructuring requests from corporates and MSMEs
Of the ₹6,493 crore that SBI is currently considering to restructure, around ₹4000 crore is from corporate accounts and ₹2,400 from the retail book. Even within retail, micro, small and medium enterprises (MSMEs) have a larger share.

The ₹4000 crore in restructuring requests from corporates that SBI has received so far come from 42 businesses — none of them are large.

“We shouldn’t have too many slippages on the corporate side because we’re actually looking at it account by account. It has been accounted for the additional restructuring requests that may come in till December 2020,” said Khara.

However, SBI estimate of ₹13,000 crore in slippages by the end of December is primarily based on defaulters in the corporate and MSME segment.

Retails loans will grow
Even though the bank has received over 2,600 applications for personal loans, they count for a small part of the overall restructuring book. The bank claims most of the loans given out without its retail sector is to customers employed at big firms and government or quasi-government jobs.

“In the home loan book, we normally have first time home buyers. Considering the average ticket size, we don’t see any challenges when it comes to delinquencies in home loans,” said Khara.

In fact, growth in the retail segment will be the bank’s primary level for growth going forward where it expects to outperform the industry.

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