The Hindu Business Line : SBI to raise Rs 4,000 cr subordinate debt

STATE Bank of India on Thursday said it would raise Rs 3,000-4,000 crore subordinate debt in the next financial year and is also looking at acquisitions in Africa, Asia besides at home.

"We are examining the use of Rs 3,000-4,000 crore extra capital, which will be raised as subordinate debt during the next financial year," the SBI Chairman, Mr A.K. Purwar, told reporters on the sidelines of Skoch summit here.

SBI's associate banks have already raised Rs 600-800 crore subordinate debt to meet the requirement.

"The credit growth this year has been exceptionally high at 26 per cent from January 2004 to January 2005. We will need more capital due to this credit growth," Mr Purwar said.

He said the bank was also examining proposals for acquisition of small-to-medium sized banks in Africa, Asia and India. "We hope to finalise one or two more deals during the next financial year," he said.

On non-performing assets, which stood at 2.53 per cent during the last financial year, Mr Purwar said, SBI may be able to reach around 2.3 per cent during the present financial year, and hoped to reach two per cent by 2005-06.

Mr Purwar said he expected the consolidation process to gain momentum. "We are looking at virtual merger of associate banks which will lead to common financial and accounting standards. A lot of virtual mergers is in the offing, but legal mergers will take some time," he said.

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