SBH to set up 150 branches by March

State Bank of Hyderabad, an associate bank of State Bank of India, will set up 150 branches by March next year, of which about 50 per cent would be outside Andhra Pradesh.

“The bank has 171 branch licences pending. We can reckon up to Rs 500 crore upper Tier II capital and Rs 1,210 crore lower Tier II capital,” said managing director Renu Challu.

As part of this, the bank would open a branch in Bihar and Gawahati shortly. With this, it will have a presence in most of the states including the northeast.

Challu said SBH’s current focus was on the retail segment. “With markets improving, we feel the housing sector will be the key driver of business,” she said. The housing portfolio as of March 2009 stood at Rs 3,474 crore, up 23.73 per cent, from Rs 2,808 crore the previous year.

For vehicle and car loans, it has an outlay of Rs 476 crore. The educational loans segment too was growing, she said. This year, the bank disbursed Rs 252 crore educational loans and has an outstanding of Rs 850 crore in all. “The government’s decision to pay scholarships to students through banks is getting us a lot of customers. The average cost per new account is Rs 50,” she said.

Meanwhile, the bank has taken up financial inclusion in three districts of Andhra Pradesh — Mahabubnagar, Karimnagar and Medak. In the next phase, it would cover Nellore and Adilabad. “Vendors for the three districts have already been finalised and for Nellore and Adilabad they will be finalised this month. We will do our own products on a business correspondent model in these two districts apart from social security pensions and other government sponsored programmes,” she said.

On the fee-based services, SBH, which is a corporate agent for SBI Life Insurance, earned premium revenues of Rs 47 crore in a three-month campaign that ended mid-September. “This will give an income of Rs 7-8 crore,” she said, adding the bank was targeting an income of Rs 30 crore from the non-life segment for which it has tied up with United India Insurance.

Though the bank is relieved with the decision to restrict the transactions at a third party ATM to five, it still ends up paying about Rs 100 per customer for using other bank ATMs.

She said the bank had restructured loans worth Rs 1,473 crore last year. “Some assets are seeing a stress due to drought and subsequent failure of farming activities. However, it is difficult at the moment to assess the restructuring required. The rabi loans will start on time.”