The State Bank of India (SBI) is aiming to double its existing home loan portfolio to Rs 10 lakh crore over the next five years, its Chairman Dinesh Kumar Khara said on Wednesday. The bank’s Real Estate and Housing Business unit has grown five times in the last 10 years, from Rs 89,000 crore assets under management (AUM) in 2011 to Rs 5 lakh crore as of 2021.

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"We will get to the next Rs 5 trillion much faster than the 10 years it took us initially. We are targeting a (home loan) portfolio of Rs 7 lakh crore in three years’ time and Rs 10 lakh crore in five years’ time,” Khara said in a press conference.

SBI saw the highest sourcing, sanctions, disbursements, and growth that the bank had ever registered in its December quarter. It forayed into the home loan business in 2004 with a total portfolio of Rs 17,000 crore. A separate Real Estate and Housing Business Unit (REHBU) came into being in 2012 with a total portfolio of Rs 1 lakh crore. It commands a market share of 34 percent in the home loan segment despite being a late entrant and is followed by the largest private mortgage lender HDFC Limited, which has a third of the market share.

On average, SBI said it onboards around 1000 home loan customers per day. With interest rates in the segment starting at 6.80 percent per annum, Khara said SBI was the country’s cheapest home loan provider. He added that the home loan portfolio has a gross non-performing asset (NPA) ratio of about 0.68 percent, despite the COVID-19 induced stress. He added that of the bank’s 39 lakh plus borrowers who were eligible for RBI’s COVID-19 restructure scheme, only about Rs 10,000 crore opted for it, with a total outstanding of just Rs 2,500 crore. CS Setty, SBI’s Managing Director and head of its retail business added that more than 60 percent of the bank’s home loan customers have a minimum CIBIL score of 750, which showed the quality of its book. He added that 72 percent of SBI’s home loan customers are salaried individuals.

To lure customers to take home loans, SBI has completely waived off the processing fee on such loans until March 2021 in SBI approved projects. The bank has sanctioned close to 2 lakh home loans under the Pradhan Mantri Awas Yojana (PMAY) so far. SBI is the only bank designated by MoHUA (Ministry of Housing and Urban Development) as the Central Nodal Agency (CNA) for processing the PMAY subsidy.

"We feel that combining technology with personalized service is the key in the current scenario. The bank is also working on various digital initiatives to improve the efficiencies in home loan delivery including a unique integrated platform Retail Loan Management System (RLMS) which will provide an end-to-end digital solution," Khara said.

The bank's average ticket size for home loans has risen from Rs 25 lakh a few years back to Rs 31 lakh now, and is expected to remain at the current level for the near future, Khara said.

First Published:Feb 10, 2021 1:00 PM IST