Big-ticket investments to take off on steady demand: SBI Chairman CS Setty

Mumbai: State Bank of India chairman CS Setty has told ET that corporates should start investing once consumption stabilises in the world’s fastest-growing major economy, which the country’s biggest mass lender expects would expand more than 7.5% in FY27. The lender, which recently crossed 100 lakh crore milestone in total business, has ruled out equity dilution in the next five years, and aims to be the first bank to earn 1 lakh crore in annual net profit. Speaking with ET, Setty said SBI expects to gain 16-17% market share in loans to small and medium companies from 13% now. He ruled out aggressive deposit rate cuts and noted that exporters are coping with tariff challenges through geographic diversity. On PSU bank consolidation, he said SBI would prefer to grow organically as it is adding `10 lakh crore business each year. C S Setty, chairman of country’s largest lender, State Bank of India (SBI), expects a structural transformation in bank balance sheets over the next decade as customers diversify savings into mutual funds, insurance and pensions, while maintaining that low-cost deposits are critical. In a conversation with Sangita Mehta and Joel Rebello, Setty shared his views on the impact of punitive US tariffs on exporters, credit growth, wealth management, M&A financing, initial public offering valuations, and MSME lending. Edited excerpts: Do you believe there is a bubble in the IPO market? It is important to realise that today, we need a lot of good companies to invest in. There is a lot of money flowing into the stock market. If there aren’t enough in the universe of investing companies, investors are investing in the same ones repeatedly. I think it is important that diversified companies are listed on the exchanges. Are issues mispriced? Pricing and valuation are like beauty in the eyes of the beholder. So, it is all about who is looking at that investment. Are you seeing an impact on exporters due to tariffs? It is too early to assess. Surprisingly, a lot of exporters can diversify their geographical markets in a short span of time. Some sectors, particularly marine, which have large exposure to the US, face a lag because supply chain movement needs certifications and approvals. We have not seen any major impact on our portfolio yet. It could be because they are able to diversify their geographical markets. The real major impact will be felt the next quarter. I am also not foreclosing that the Reserve Bank of India (RBI) restructuring scheme will not be having any demand. We are in talks with the RBI to extend the relief measures by a quarter post December. What is your outlook on growth and inflation for FY27? We expect growth to cross 7.5% and inflation to be below 4%. There is a buzz about PSU bank consolidation. Is anything on the cards? There is no formal discussion on this. SBI is a fairly large bank with a good potential to grow organically. We are adding almost `10 lakh...

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