SBI to raise $3-$4 bn offshore; to launch bond underwriting

State Bank of India plans to raise $3-$4 billion in offshore debt in the current fiscal year.

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State Bank of India (SBI) will raise $3 billion to $4 billion in offshore debt in the current fiscal year and plans to foray into the domestic bond underwriting business as it looks to cement its position as the country’s top lender,chairman Pratip Chaudhuri said on Thursday.

The state-controlled bank,however,has cut its loan growth target to 17-19 per cent for the fiscal year that began in April,from a forecast of 20-22 per cent made in January,as rising interest rates curb borrowing,Chaudhuri said in an interview.

“Loan growth,I think,after the rate hike,we would not be very ambitious,” he said.

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“We expect some deceleration in the term loan segment and some shifting of demand from rupee to external commercial borrowings,” he said.

The Reserve Bank of India (RBI) this month raised its key interest rates by a larger-than-expected 50 basis points to battle stubbornly high inflation.

It was the central bank’s ninth rate increase since March 2010.

Following the RBI’s tougher-than-expected move,several banks including SBI raised their lending and deposit rates.

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Of the bank’s planned overseas fund-raising,$1 billion to $1.5 billion is expected around July,said Chaudhuri,who assumed the top position at SBI a month ago.

Shares of the bank,valued at around $38 billion,have fallen nearly 6 per cent so far this year,roughly in line with the fall in the BSE Bank index. The broader 30-share benchmark BSE index has fallen by 10 per cent in the same period.

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