| SBI plans to raise funds abroad under MTN | |
| Press Trust of India / Mumbai Feb 13, 2012, 20:25 | | | | | |
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State Bank of India (SBI) plans to raise money from overseas markets under its medium-term-note programme (MTN) in the current year as interest rates are likely to turn attractive overseas, a top bank official said today.
"We will go to the market in the current year as the situation improves and interest rate turns attractive overseas. Though the amount is not decided, it will be a benchmark issue," Managing Director and Group Executive for International Banking Hemant Contractor told reporters here after announcing the December quarter earnings.
The benchmark issues are typically $500 million or above made at a coupon close to market rates.
He also said at present rates are on a higher side due to the risk aversion attitude of European banks.
The largest lender in India has a mandate to raise $10 billion by 2015, out of which it has already raised $4.1 billion.
The bank had plans to raise $5 billion capital through selling dollar bonds in global markets in the current fiscal. However, it refrained from entering the market due to the ongoing Eurozone crisis, which led to risk aversion on the part of European banks to emerging economies.
Further, the interest rate differentials between overseas borrowing and domestic advances narrowed down, which also restricted the bank to raise money last year.
However, Contractor said sentiment is improving in the global markets and interest rates are likely to turn attractive soon.
"Sentiment in European banks are improving and we hope that interest rate differential will soon become attractive," he said.
Referring to growth in international banking division of the bank, he said that things are progressing well.
"International business accounts for around 15 per cent in terms of revenue and profit for the bank and is progressing well," he said.
About bad assets from international operations, Contractor said though some slippages have been witnessed during the December quarter, "we don't expect nasty surprises in the 4th quarter".
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