Business Daily from THE HINDU group of publications
Sunday, May 13, 2007
ePaper
Business Daily from THE HINDU group of publications Sunday, May 13, 2007 ePaper |
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Money & Banking
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Diversification
Our Bureau
Growth plans Aims to deploy about Rs 5,000 crore for private equity business Short-lists potential partners for general insurance foray Also eyeing fresh recruitments;
Kolkata May 12 State Bank of India has proposed to enter into a slew of new businesses, including private equity. It has identified at least three other businesses that it hopes to enter - general insurance, merchant acquisition, financial planning & wealth management. Besides, it is also keen to embark on pension fund management, subject to regulatory approval. The bank, said Mr O.P. Bhatt, Chairman, is looking at tying up with strategic partners on a selective basis. As for private equity, where it aims at deploying about Rs 5,000 crore, it is in talks with a few players, all of which are well known for their experience and reach. The bank may announce its plans in this regard in the weeks ahead, in about a month. The intention is to provide private equity to select infrastructure-related projects - an area that has shown much promise lately in India. SBI is further eyeing the general insurance business, for which two or three potential partners have been short-listed. The bank, Mr Bhatt told newspersons, may leverage its life insurance or asset management outfits to enter into some of the new segments. SBI Life is a joint venture with Cardiff, while SBI Asset Management is a joint venture with Societe Generale. SBI is further looking at financial planning & wealth management, for which a training process has been initiated. More personnel will be trained for an area that the bank feels will gain considerable importance in the coming years. It is also willing to gain entry into the pension fund management space, which is currently being opened up to professional fund managers. The bank, which needs to form a separate venture for this, feels it is well placed to be considered by the pension regulator.
Retail broking
SBI is further in the process of establishing a firmer presence in the retail broking segment. It has tied up with stock broking group Motilal Oswal for this purpose; the broking network will be spread to new centres in a phased manner, the Chairman said. At another level, the bank is eyeing fresh recruitments. It intends to sign up about 3,000 clerical personnel and 2,500 officers. The latter will include specialists, to be engaged for segments such as agriculture and SME.
capital raising plan
SBI is aiming at mobilising around Rs 15,000 crore this year, Mr Bhatt said, adding that talks have commenced with investment bankers. "We are discussing ways of raising additional resources. It will be a mix of options, both debt and equity," he said. However, details of these options are not being talked about at the moment. The bank's MTN programme for $1 billion (which was set up in November 2004) was increased to $2 billion in August 2005. It was further updated, and its scope widened to partly include raising of funds for capital purposes (that is, Upper Tier II and Hybrid Tier I). The programme has now been increased to $ 5 billion, it is pointed out.
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