SBI home loan disbursals shrink 14% in first half

The slowdown in the real estate segment has started playing out in the banking sector.

Home loan numbers for the top lender State Bank of India (SBI) have dropped 14% in the first half of the current financial year, or by about `1,000 crore, from a year ago.

A senior SBI official said, “We have seen a shortfall of close to Rs1,000 crore in the first half of this financial year.” The bank had disbursed close to Rs7,000 crore of home loans in the first half of the last financial year.

The official said the home loan segment will suffer a drop for the full year as well.

“In the current situation, we do not intend to push it further as it stresses out the asset quality,” he said, adding that any announcement in the forthcoming Budget, however, could change this trend.

National Capital Region (NCR) and Mumbai contribute significantly to home loan volumes and a slump in these markets is said to be the main reason for the decline in the numbers.
State-owned SBI, India’s largest lender, has a market share of close to 12% in Mumbai region and 9% in the NCR.

At present, sales in tier II and III cities are the main driver of home loan sales. The SBI official said the figures would have been abysmal in the absence of good volumes from these cities. Among segments, loans in the mid-segment of between `25 lakh and `70 lakh have taken a maximum hit as buyers are waiting for inflation to cool and real estate prices to fall further.