After reporting 69 percent decline in consolidated net profit to Rs 576.46 crore in the second quarter ended September 30, State Bank of India (SBI) expects to recover Rs 6,000 crore from Essar Steel resolution under the Insolvency and Bankruptcy Code (IBC) and believed that loan growth of 12 percent is feasible in FY19.

In an interview to CNBC-TV18, Rajnish Kumar, chairman, said, "Consumer credit and housing loan continues to grow decently along with pick up in agriculture and SME (small-to-medium enterprise). As of now, major growth has come in from central government public sector undertakings."

The country's largest lender said provision write back is only for one account and rest of the accounts have been aligned to whatever the resolution plan and the estimated recovery.

"Whenever those get resolved and the bank gets paid, it will have impact on reduction in gross non-performing assets (NPAs), he said, adding that otherwise it will have no impact on P&L (Profit and Loss).

On the credit cost, Kumar said for the second quarter is at 1.99 percent, which is in line with the guidance of 2 percent for FY19.

SBI chairman said he is not worried about SME book currently as they haven’t seen any elevated numbers in terms of slippages, "The cause of worry is when large corporate account goes bad and that hits the bank."

"The normalised net interest margin (NIM) is at 2.76 percent excluding the impact of all recoveries under National Company Law Tribunal (NCLT) accounts, but they will also continue to come," he added.

First Published:Nov 6, 2018 10:21 AM IST