SBI to raise $2 b for overseas expansion
State Bank of India will raise up to $2 billion — about ₹12,700 crore at current exchange rates — over the next two fiscal years to fund its overseas expansion.
India’s largest lender intends to raise the amount through a public offer and/or the issue of bonds in US dollars or any other convertible currency.
The Executive Committee of SBI’s central board has approved the long-term fund-raising in single/ multiple tranches.
C Venkat Nageswar, Deputy Managing Director, SBI, said the proceeds from the issue of the senior unsecured notes would be used to support the bank’s overseas operations.
Nageswar said he expects the bank to raise resources at relatively cheaper rates as Moody’s had upgraded India’s sovereign rating by a notch in November 2017.
SBI has an overseas presence through 195 foreign offices in 36 countries. As of March-end 2017, the bank had total overseas assets amounting to ₹3.6-lakh crore. Total overseas revenue in FY17 stood at ₹10,683 crore.
“We have wholesale and retail banking operations overseas. We participate in local (debt) syndication and help Indian corporates raise foreign currency debt via external commercial borrowings,” said Nageswar.
According to the bank’s annual report for FY17, the bank arranged syndications aggregating $735.50 million. It also arranged 17 bilateral loans aggregating $1,396.68 million to Indian corporates on a bilateral basis.
The report said the bank’s international operations are guided by the overarching principle of supporting global Indian corporates and Indian diaspora spread across geographies.
In addition, it also targets the local populace in line with its vision to become a truly international bank.
Source: The Hindu Business Line