State Bank of India (SBI) will raise up to Rs 50,000 crore in this financial year in debt from both the domestic and overseas markets.
The bank informed the bourses that its board has cleared a proposal to raise the funds through various instruments such as long-term bonds, and additional Tier 1 and Tier II bonds.
India’s No. 1 bank will take the private placement route among both Indian and overseas investors, the filing said.
The fund-raising plans come as lenders’ loan growth outpaces growth in deposits.
Demand for bank loans has consistently stayed in double digits despite a 250-basis points rise in interest rates since May last year.
SBI’s loans grew nearly 16 per cent on-year in the January-March quarter compared with a 9.19 per cent growth in deposits. The lender expects loans to grow 12-14 per cent in fiscal 2024.
In the last fiscal, domestic retail loans grew 17.64 per cent, followed by domestic corporate loans at 12.52 per cent. The bank reported 14.07 per cent growth in home loans.
In April, SBI raised $750 million through five-year dollar-denominated bonds at a semi-annual coupon of 4.8750 per cent through its London branch.
In March, the lender locally raised Rs 3,717 crore through Basel III-compliant AT-1 perpetual bonds at a coupon of 8.25 per cent. SBI shares are down about 1 per cent since the results and about 5.5 per cent lower so far this year.
In his letter to shareholders, SBI chairman Dinesh Khara said the lender is comfortably placed in terms of growth capital in the current year. ''With declining credit cost, opportunities for lending in sunrise sectors such as sectors identified under PLI scheme, renewables as well as electric mobility will be explored to diversify the portfolio,’’ he said.
SBI’s March quarter net profit zoomed nearly 90 per cent to Rs 18,094 crore on a consolidated level, helped by a robust performance on the core income front and an improvement in asset quality to the decadal best.
In the letter to shareholders, Khara said while SBI has been reporting robust financial results successively for the last three years, its ability to absorb unexpected losses has also improved. ``Healthy internal accruals reinforce its ability to tap capital market if warranted,’’ he added.
In the last fiscal, Xpress credit loans — a category of personal loans — crossed the Rs 3 lakh crore mark at Rs 3.04 lakh crore, showing a growth of 23 per cent over last year.
Earlier this week, SBI Cards said it would raise up to Rs 3,000 crore by issuing non-convertible debentures to fund business growth. This fundraising would be done through private placement in one or more tranches over some time, it added.