State Bank of India expects recovery after hitting rock bottom with $1.13b Q4 loss

The bank expects to grow loans at an annual average of 12% and bring bad loans below 6%.

Reuters reports that State Bank of India (SBI) is anticipating a rebound in the coming years after posting a record $1.13b loss in Q4 due to higher bad loan levels. 

Also read: Can Indian banks weather the last wave of bad loan resolution?

The state lender is targeting loan growth at an annual average of 12% through March 2020 and bring its non-performing loan ratio below 6% in the two-year period. 

“Last year was a year of despair. This year is a year of hope, and next year will be a year of happiness,” said chairman Rajnish Kumar. He similarly expects the net interest margin and return on asset ratio to improve by 2020, to bring back positive cash flow for the embattled lender.

State banks in India were bogged down by massive $14b in bad loans in Q4 brought about by stricter central bank rules on bad loan recognition, further aggravated by questions surrounding its integrity following a $2b fraud which unraveled at state lender Punjab National Bank.

Here’s more from Reuters: