At a time when Covid-19-propelled economic and financial uncertainties are looming large, challenges are manifold for 59-year-old Dinesh Kumar Khara, the newly appointed chairman of State Bank of India (SBI).

On Wednesday, after taking charge from Rajnish Kumar—SBI’s outgoing chairman whose three-year term ended on October 7—Khara, in his maiden media address as SBI chairman, highlighted that it would be his constant endeavour to deliver value to stakeholders.

Khara said his top priorities would be the safety of employees and customers, and the quality of SBI’s loan book. “My top three priorities are safety of our employees who are serving our customers, safety of our customers, and quality of our (loan) book,” Khara told reporters in the virtual address.

The Covid-19 induced distress has been the cause of borrowers’ urge to opt for loan restructuring. “We are very closely observing the behaviour of people who are keen to avail restructuring,” Khara said. He added that SBI has created a website for people who are interested. “Whatever number we have seen till now, it is very much manageable.“ On corporate borrowers interested in availing loan restructuring, Khara said not too many of them had reached out to the bank as yet.

Answering queries around SBI’s fundraising plans—as the bank has shareholder approval to raise up to ₹20,000 crore—Khara’s view was that SBI’s current capital adequacy ratio was fairly comfortable in light of the credit growth that the bank has been witnessing.

However, Khara highlighted that apart from equity, there were options in tier 1 and tier 2 categories as well. “We have raised money from tier 1 and tier 2,” he said. He also added that SBI would like to access the capital market for incremental capital raising, as and when it sees the traction building up in its assets. “We will wait and watch for some time.”

Going forward, Khara said that strengthening the balance sheet will be an important task, and as far as provisioning was concerned, up-fronting will continue as in the past. He said that SBI’s legacy trouble accounts had already been provided for, with corporate provisioning coverage ratio (PCR) standing higher at 85%, while general PCR stood at 83% in the quarter ended June 2020.

Khara, however, warned that on new cases which could require resolution, the bank had no immediate visibility. Given the distress brought on by the Covid-19 pandemic, this was one of the trouble zones for the banking sector at large, and SBI in particular, which has a 20% share of the country’s total advances.

Unlike his predecessor Kumar who was reportedly unhappy to have witnessed erosion in SBI’s market capitalisation during his tenure, Khara claims to be someone who as chairman does not have ambitious targets for the bank on this front.

For the record, in terms of monthly average market capitalisation, SBI under Kumar saw an absolute decline of over ₹93,820 crore between October 2017 and October 2020. In percentage terms, the absolute fall was in excess of 35%.

Khara pointed out that SBI’s price to book ratio of 0.3 times convinces him as a chairman to have reasonable expectations and that the market values the public sector banking giant well.

On Khara’s appointment, Motilal Oswal, MD & CEO, Motilal Oswal Financial Services, said that it augurs well for the overall functioning and continuation of the business strategy that SBI has been pursuing over the past few years.

“While Khara takes charge amidst significant macro uncertainty induced by Covid-19, we expect SBI to perform relatively well and deliver strong earnings traction under his leadership,” Oswal said. “This will be enabled by the bank’s approach in promptly dealing with stressed accounts and alongside sharply improving the provisioning coverage over the past few years.”

On his part, Khara argued that the bank has been closely monitoring corporate cash flows, and everything is not hunky-dory. It may be a little too early to gauge the waters as being clear. This is because Covid-19-related shocks and surprises are more of a routine affair now, and will remain so in the near future.

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