The PSU lender took nearly 10 years to grow its home loan book to Rs 5 lakh crore, but aims to double that in next five years.
“Going forward, home loans will continue to be a major focus area for us. The home loan book is now the single-largest portfolio in the asset base of
. We aim to grow it to around Rs 7 lakh crore in three years and Rs 10 lakh crore in next five,” said Dinesh Khara, Chairman of the country’s largest lender by assets.
To do this, the PSU lender aims to leverage its low cost of borrowing, which allows it to offer very competitive interest rates. The lender currently offers home loans at an external benchmark rate of 6.65 per cent, the cheapest in the industry.
That has helped the bank take over customers from rival banks and non-banking lenders. Khara said almost 23 per cent of the Rs 5 lakh crore home loan portfolio comprised takeover loans.
This is bound to make life difficult for the home finance companies, as SBI’s wide network, ready access to the salaried class and cheaper cost of funds provide it a huge advantage over the competition.
Khara said the younger generation is looking to buy homes much earlier than what was the trend among the previous generations. Almost 42 per cent of SBI’s home loan customers are under the age of 40 years, he said.
In terms of asset quality in home loans, less than 1 per cent of the SBI book was non-performing while the overall quality of the book remained strong as almost two-thirds of the customers belonged to the salaried class.
Khara said besides home loans, personal loans would be engines of growth for the bank going ahead. The lender is building capabilities to stave off competition from other large banks and non-bank lenders.
State Bank of India shares traded at Rs 390.40, down 1.1 per cent, on the National Stock Exchange on Wednesday.
