1. Real Estate and Housing Business
CGMs CONCLAVE
Real Estate and Housing Business
- Opportunities, Challenges and Strategies
Presented by:
B V G Reddy
Ajit Sood
Deepankar Bose
Alok Kumar Choudhary
Vaijinath M G
Real Estate & Housing Business Unit
Slide No.1

2. Where we stand….
Total RE Portfolio Rs. 2,18,850 crores as on , as against Rs.1,93,500 crores of our nearest competitor 1
RE portfolio: Nov. 2016: 35.44% of NBG loan Book, 19.24% of Bank’s total loan Book, with 25.79% market share in ASCB. (March 2015: 25.34%, March 2016: 25.54%) 2
YOY Growth 20.61% as on as against 15.89% as on Competition: Sept.16: HDFC (AUM):18%, ICICI:19.32%, Axis:17.16%, LICHF:14.73% 3
Home Loan and Home Related Loan NPAs as on : 0.68%, as against % of HDFC Ltd and 0.32% of LICHFL 4
Average TAT: SBI: 12 days, HDFC Ltd: 5-10 days, ICIC Bank: 4- 8 days. 5
Real Estate & Housing Business Unit
Slide No.2

3. Opportunities: Home Loan Market – Major Business Drivers
1. Government Policy Initiatives:
Real Estate Regulation & Development Act- 2016
Housing for All by 2022
PMAY – Interest Subsidy, Thrust for Affordable Housing
Income Tax Rebates
Demonetization, Benami Transactions Act, REITS, Smart Cities
2. Demographic Dividends / Mortgage Market / Affordability:
65% population below 35 years of age,
Increasing employment opportunities and growing urbanization
Under-Penetrated Indian Mortgage Market
Increasing affordability – Growing income levels, Declining Interest Rates
Home Loans expected to 16-18% during next 2-3 years
Excellent opportunity for Project Funding
Advantage SBI:
Largest Branch Network & Customer Base, Existing Corporate & Govt. Relationships, Project Finance Capability in place, Pricing Power etc.
Real Estate & Housing Business Unit
Slide No.3

4. Challenges…. Key Challenges Suggested Strategy / Action Plan Timeline
Sl. No
Key Challenges
Suggested Strategy / Action Plan
Timeline
[Owner] 1.
Tough Competition leading to
- Pressure on Portfolio
profitability
Leverage on long term relationship for Up-Selling/ Cross-Selling Other/Combo Products - from present 2.72 products to minimum 4 Products per borrower
Differential Pricing - based on Risk
Profile of the customer,
Improve productivity and reduce cost by leveraging on IT, Consolidation of Processes and Outsourcing.
Circles
(ongoing basis)
REHBU
(Dec. 2017) 2.
Issues in Delivery:
Time consuming traditional Delivery Channel involving Physical movement of papers
b. Lack of adequate feet-on-
street
End-to-end digitization of Delivery
Channel
Increasing the strength of HLST /
BST from 800+ to by June
2017, by Dec and
Extension of SSL activities to top 25
Centres by June 2017 & 40 centres
by Dec. 2017
REHBU / Team Lotus
(Sept. 2017)
Real Estate & Housing Business Unit
Slide No.4

5. Challenges…. Key Challenges Suggested Strategies / Action Plan
Sl. No
Key Challenges
Suggested Strategies / Action Plan
Timeline
[Owner] 3
Capacity Building
Conversion of over 40 Potential Non-BPR Centres into BPR Centres by opening new RACPCs at these centres
Opening additional RACPCs at large potential centres
Strengthening LPCs or opening of new CPCs on the lines of Buldhana model for handling volumes from non-BPR Branches
Leveraging IT for consolidation of Pre & Post- Sanction Processes,
Expanding Online Reach through IT Solutions and Collaborations
RACPCs to work on Saturdays & Sundays – Weekly off on a week day / Documentation Desks during week end
Digitization and Consolidation of Document Storages by opening Loan DACs at remaining large centres
REHBU & Circles
(Dec. 2017)
(Sept. 2017)
(June 2017)
REHBU
(Ongoing basis)
Circles
(ongoing basis)
REHBU, BPR & Circles
Real Estate & Housing Business Unit
Slide No.5

6. Challenges…. Key Challenges Suggested Strategies / Action Plan
Sl. No
Key Challenges
Suggested Strategies / Action Plan
Timeline
[Owner] 4
Channel Strategy
Strengthening & Leveraging of all 5 channels:
1. Branch Channel:
- Sourcing budget under CDS for BPR Branches
- HL/Retail Assets Sales Desk in potential branches
- Tapping Customer base through Analytics for offering
Pre-Approved Products & Cust. Referral programs
- Leveraging relationship with Govts.,Corporates and
Subsidiaries for marketing to their employees –
Mapping of one RM (HL) to each Subsidiary, MCG &
CAG Branches and to CAM.
Digital Channel – OCAS, Google Search Engine,
Collaborations with Online Aggregators
HLST & BST – Outbound Sales Teams:
- Doubling the strength
SBI Cap Sec. Ltd: To cover top 40 centres
Agency Channel: Empanelment / activation of Marketing Consultants (retired staff) , HLCs / Marketing Associates (Builders), Subsidiary agents
REHBU / HR / Circles
( )
REHBU /
Analytics / Circles
(ongoing basis)
REHBU & Circles
( )
REHBU
(June/Dec. 2017)
Real Estate & Housing Business Unit
Slide No. 6

7. Challenges…. Sl. No Key Challenges Suggested Strategy / Action Plan
Timeline
[Owner] 5
Not the banker of the first Choice for Builders
Leverage on newly created Builder Finance Dept. under REHBU
Online Listing Services for Builders’ Approved Projects and Review of Project Approval Guidelines
Mapping of Relationship Officer / Executive for each of the Approved Projects
Qtly visit by CMC members and Bi-monthly visit by
DGM (RE / PBBU) and DGM (B&O) to all major
Builders- Under Builder Connect Programme
MoU with top Builders / Joint Marketing Activities / Partcipation in CREDAI /NAREDCO Conclaves
REHBU & Circles
(ongoing basis)
REHBU
( )
( ) 6
Ensuring credit Quality
Migration of Pre-Sanction Credit Process from Non- BPR Branches to LPCs or CPCs to be opened on Buldhana Model
Implementation of collection Module
Outsourcing of Collection to BCs / CSPs etc.
Zero tolerance for non-initiation of action under
SARFAESI Act within 15 days of slippage
Leveraging Contact Centre, Use of Analytics
and other IT tools,
(June 2017)
REHBU & GITC
( )
Circles
Real Estate & Housing Business Unit
Slide No.7

8. Other Strategies …. Issue / Area Suggested Strategy / Action Plan
Sl. No
Issue / Area
Suggested Strategy / Action Plan
Timeline
[Owner] 1
Weak After-Sales Service leading to Customer Complaints
Creation of dedicated Maintenance Hubs at all major
centres by hiving off maintenance activities from all
RACPCs at the centre
Manning of Customer Relations Desks by an Officer at all RACPCs / RASMECs
Migration of certain services to digital platform – Submission of request for disbursements, Generation of Interest Certificate etc.- on Home Loan Microsite
Town Hall Meetings exclusively for Home Loan Borrowers – Once in a year at every BPR centre
REHBU & GITC
(Dec. 2017)
Circles
( )
( )
REHBU & Circles
(June 2017) 2
Ensuring Profitability of Maxgain
Development of a Combo Product (Term Loan + Overdraft) OR
Recovery of Commitment Charges
( ) 3
Higher TAT for TIR and other legal issues
In-House legal team – on pilot basis
Visiting Legal Experts on the lines of Visiting Medical Practitioners
REHBU
Real Estate & Housing Business Unit
Slide No. 9

9. Thank You