The Hindu Business Line : SBI plans to buy loan portfolios

STATE Bank of India's management intends to seek its board's permission to buy securitised paper — loan assets from other financiers, the bank's Managing Director Mr P.N. Venkatachalam, has said.

AT an informal meeting with presspersons here, Mr Venkatachalam said that SBI would, however, restrict itself to securities that enjoyed the highest rating.

Buying loans is another means to increase retail business. Retail portfolio (such as housing, vehicle and personal loans) is growing fast across the financial sector. In the case of SBI, retail loans portfolio is set to increase by nearly Rs 12,000 crore this fiscal, the Managing Director said.

"Retail loans are increasing by about Rs 800 crore to Rs 1,000 crore per month," Mr Venkatachalam said.

Half of SBI's retail portfolio is housing loans. A major portion of the other half is loans for automobile purchases. Here again, a tie-up with Maruti has helped. SBI lends for over 5,000 cars of Maruti alone, every month.

Other than retail, loans to agriculture are going up. An indication of this is the success that SBI has met with tractor loans. Under a tie-up for with three tractor manufacturers, SBI lent money for the purchase of more than 2,000 tractors in two months, Mr Venkatachalam said.

He did not see much scope for interest rates to go down further. On the other hand, government-fixed interest rates on savings instruments— like post office savings and RBI Relief bonds— could come down, since administered rates could not be out of line with the market rates, he said.

Eyes overseas buys

STATE Bank of India "would not rule out" acquiring banks abroad, the bank's Managing Director, Mr P.N. Venkatachalam, has said.

"We are not averse to inorganic growth, but valuations are high", he said.

In an informal chat with presspersons here, he said that the bank would increase is presence through acquisitions, if the price for the buy was right.

SBI is in the process of opening offices/branches abroad and having a re-look at its international operations. It is awaiting permission from the Chinese authorities to convert its representative office there into a full-fledged branch.

It also intends to open a few branches in West Asia.

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SBI plans to buy loan portfolios