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State Bank of India (SBI), on Friday, said it has sanctioned Covid-19-related loans aggregating ₹17,116 crore so far. Further, 22 per cent of its customers have availed loan repayment moratorium.
The aforementioned loan sanctions include emergency lines sanctioned to micro, small and medium enterprise (MSME) customers.
India’s largest bank said it has opened up Covid-19-specific credit lines for quick assessment and loan sanction, and reduced margins and reassessed working capital cycle for customers.
The borrowers belonging to sectors impacted by Covid-19 constitute only 4.50 per cent of the bank’s total domestic advances of ₹20.65-lakh crore.
The sectors impacted by Covid-19, as per the bank’s analyst presentation, are: other private sector non-banking finance company (SBI’s exposure: ₹29,530 crore); independent power producers – rated below ‘A-’(₹27,554 crore); commercial real estate, excluding lease rental discounting (₹26,665 crore); tourism, hotel and resorts (₹9,268 crore); and aviation (₹466 crore).
Job cuts
On the possible impact and emerging challenges due to Covid-19 on the retail segment, SBI referred to likely job cuts and salary reductions. However, the bank emphasised that it faces relatively low level of stress on account of higher proportion of government/ quasi-government sector customers.
When it comes to SME customers, the bank underscored the low level of economic activity and reduction in repayment capacity and likely decline in value of collateral.
In the case of the agriculture segment, the bank said it has cleaned a significant part of its book in FY20. This segment is relatively less impacted by the Covid-19 disruption.
In the case of the corporate segment, SBI underscored that the sectors impacted by Covid such as hospitality, CRE, aviation, non-banking finance companies (NBFCs) form less than 10 per cent of corporate loan book. As such, several risk mitigants are in place to prevent significant deterioration in asset quality, it added.
In order to protect core pre-provision operating profit (PPoP), the bank is focussing on cost rationalisation and adopting new ways of working – Flexi SBI.
“Rationalise and reskill workforce, improve staff productivity, redeploy workforce from administration to sales roles,” said the presentation.
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