India's largest lender, State Bank of India's growth is likely to emerge as a big challenge for the bank in next financial year.
According to broking firm Goldman Sachs, which had a meeting in the first week of this month with divisional heads of SBI, the slippages of the bank is likely to fall or stabilize. And, net non-performing assets might also fall by the end of March to 2-2.5 per cent as compared to 2.4 per cent in the September-end.
Goldman Sachs said in a note, "The management indicated that NPLs (non-performing loans) are near a peak but growth will be a bigger challenge in FY14". Improving asset quality will also prompt the lender to increase its provision cover and also prepare for a pay rise.
SBI is not focusing on the mid-corporate loans as demand for large corporate loans are still not much. Growth is expected to come from the home loans and auto loan segments. However, Mortgages will remain the key driver, with 25-30 per cent growth expected.
SBI has seen home loans approvals increasing to Rs 150 crore a day. The number of application it received for home loans has doubled in the past couple of months.
Auto loans grew by 28 per cent in the first half of the financial year and it is expected to grow on the same pace.