rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » SBI eyes big-ticket banks abroad

SBI eyes big-ticket banks abroad

November 15, 2005 12:19 IST
State Bank of India has now set sights on acquiring medium and large-sized banks overseas, after having bought three small banks in Asia and Africa in less than a year.

SBI focused on acquiring small banks abroad to gain experience and, hopefully, it has provided the skills and understanding to go in for acquisition of medium- and large-sized banks abroad, the bank's chairman A K Purwar said.

The bank is now interested in acquiring a bank in Bangladesh, he said. Last week, SBI signed a pact to acquire a small Indonesian bank, PT Bank IndoMonex, for about $6 million, to foray into Indonesia and expand its presence in the Asean region.

Earlier this year, SBI had bought a 51 per cent stake in Mauritius-based Indian Ocean International Bank, which has a network of 10 branches and 10 ATMs.

It also acquired a 76 per cent stake in a closely held Giro Commercial Bank of Kenya for about $7 million.

Referring to plans to raise Rs 3,300 crore (Rs 33 billion) though subordinated bonds for boosting tier-II capital, Purwar said, "We are internally debating on raising about $200 million of it in the overseas market." These bonds will have maturity of around 60 months.

SBI is raising resources to maintain comfortable capital adequacy ratio, which currently stands at around 11 per cent. Purwar said there is pressure to raise short-term interest rates, but SBI has not yet taken a view.

"We are still reviewing the situation," he said. The pressure for increasing interest rates is greater since the 25-basis point hike in the reverse repo rate by the Reserve Bank of India in its mid-term review of annual monetary policy.

BS Banking Bureau in Mumbai
Source: