Title: State Bank of India, Staff Training Centre, Salt Lake, Kolkata. : : stcsaltlake@xxxxxxxx : :
SBI In Talks For Overseas Acquisitions In
Asia, Africa The Financial Express Published on May 29, 2004 KOLKATA,
MAY 28: The State Bank of India (SBI)
is looking forward to acquiring scheduled commercial banks overseas, according
to its chairman AK Purwar. ?We are
seriously considering taking over scheduled commercial banks in countries like
Bangladesh, Indonesia, Myanmar and Sri Lanka in Asia and Angola and Senegal in
Africa,? Mr Purwar said at a press conference here Friday after announcing the
financial results of the bank for the fiscal to March 31, 2004. He said SBI was already holding talks
with a number of banks in these countries. However, he refused to disclose
either the identities of these banks or the probable cost. The bank is currently having 51 overseas
offices in 28 countries. ?During the fiscal to March 31, 2004, the bank?s
overseas operations recorded $40 million in revenue, up from the previous
fiscal?s figure of $25 million. If we are able to firm up our overseas expansion
plans during the current fiscal, I expect the figure to at least double by the
end of the fiscal,? Mr Purwar said. Mr Purwar ruled out the possibility of
offering another voluntary retirement scheme in the near future. However, he
added, the bank was considering an exit option for those employees who had
never received a promotion. ?This exit option is still at the planning stage,?
Mr Purwar added. He said the bank was undertaking business process
re-engineering projects and had engaged McKinsey & Co as advisor to the
project. ?McKinsey has been coming out with its
reports in parts and already we have implemented some of their suggestions in
departments like the national banking group, corporate banking, medium and
small-scale industries advances and the mortgage sector,? he said. Asked
whether there was an immediate possibility of merger of the seven associate
banks of SBI with the parent, Mr Purwar replied that they would continue to
operate as independent bodies. ?We have already synergised many of
their operations like implementation of business process re-engineering, common
technology platform and cross-selling of products. In such a situation, merger
of seven associate banks with SBI is not on our agenda,? Mr Purwar said. According
to him, the objective of this exercise is to strengthen SBI?s ability to
acquire new customers, build lasting relationships with existing customers and
to increase customer satisfaction through world-class service. Claiming that
cross-selling of products from SBI Life Insurance Co. Ltd and SBI Funds
Management Pvt Ltd has commenced in right earnest through the bank?s branch
network in the entire group, Mr Purwar said that during 2003-04, SBI have
covered over 1,28,700 lives and collected premium of Rs 82 crore. Mr Purwar informed that under the
Securitisation & Reconstruction of Financial Assets & Enforcement of
Securities Interest Act, 2002, SBI has served notices to 12,553 defaulters
involving an amount of Rs 5,114 crore, effecting a recovery of Rs 130 crore till
March 2004. ?We have also sold 76 assets involving dues of Rs 570.35 crore of
principal amount to Asset Reconstruction Co of India Ltd (ARCIL) during 2003-04
at an offer price of Rs 162.33 crore. Depending on how far ARCIL is being able
to dispose of these assets, we might go on for an higher sale of such assets in
2004-05,? Mr Purwar said. He also claimed that SBI?s credit card business,
which was 17 per cent of the total credit cards market in India, was performing
quite well.
SBI
Chief Sees Stable Interest Rate Regime
The Business Line Published on May
29, 2004 Kolkata , May 28 : MR A.K. Purwar,
Chairman of State Bank of India, expects a stable interest rate regime to
prevail in the country over the medium term despite a notable hardening of
rates in international markets. The country's largest commercial banker
simultaneously sees a growth in credit offtake in the months ahead, thanks to
the increased possibility of lending to some major sectors. "Interest rates will remain stable; they
will certainly not go down in the near term. Inflation and liquidity are at a
certain level and rate changes may not happen immediately," he said,
adding that rates have been on the rise globally. He was briefing newspersons
here after declaring SBI's results. A higher credit offtake will pose as a
key issue for the bank in the coming days, a trend that is likely to emerge
because of positive developments in areas like steel and power. In steel, for
instance, there has been large-scale restructuring and a section of steel
companies has emerged stronger in recent times. In power, too, there are signs that some companies are on their
way to financial closure. These include about ten companies with a total
capacity of 3,900 MW, ones that have a total debt component of Rs 9,700 crore.
A few other infrastructure-related segments may also look up in the coming
days. Advances in non-food segment are set to increase, the SBI chief
mentioned. "We hope to clock a 16.5 per cent growth on this front in this
fiscal," he said. The bank, Mr Purwar told Business Line,
hopes to become more active in terms of treasury operations this year. SBI,
which managed to register significant gains last fiscal from treasury
management, plans to seek opportunities in trading in various classes of
securities, including equities, this year. It will also increase its exposure
to derivatives. As for its association with the group entities, SBI sees a
bigger integration of their operations in the coming days. These banks already
operate on a common technological platform and are expected to coordinate among
themselves even more. However, no "legal merger" is on the cards. The SBI chairman said the bank plans to
look at strategic acquisitions in foreign markets very seriously this year. In
particular, it proposes to strike deals in the African and Asian markets, and
is, in fact, in the process of shortlisting a few candidates. SBI: Disappointing data SBI's Net Profit is Actually Lower than
the Previous Year's Number The Business Standard
Published on May 29, 2004 Kolkata : The State Bank of India?s annual results for FY 2004 show net
profit growth of 18.5 per cent, but if adjustment is made for a change in the
method of computing profits on sale of investments, net profits are actually
lower than in FY 2003. It posted a net
profit of Rs 3,105 crore in FY03, while the net profit adjusted for the
accounting change in FY04 amounts to Rs 2,987.30 crore, a decline of 3.8 per
cent. Small wonder, then, that the SBI
stock plummeted on Friday, falling far more than the market. Nor is the poor
performance restricted to the calendar year as a whole.
Fourth-quarter operating profits were
lower than in Q4 of the previous year, despite the above-mentioned accounting
change. Recall that operating profits in Q3, FY 2004 too were lower than in the
corresponding period of the previous year.
However, the bank has posted a substantial improvement in net interest
margin and its deposit rate cuts and the repayment of its high cost forex
deposits has helped curtail interest expenditure.
As a result, net interest income was Rs
3313 crore in Q4, compared to Rs 2773 crore in Q3, which is a sharp jump. But
there has been little change in interest earned from advances, and while the
domestic loan portfolio increased by 13.58 per cent, lower than the average
growth for the banking sector. Clearly, SBI is losing market share in
advances. Moreover, most of the
non-interest income growth during the year has been on account of profit on
sale of investments, while fee-based income grew by 12.2 per cent. Operating
expenses too were substantially higher.
Non-performing assets were 3.48 per cent
of advances as at end-March, well above the 2.88 per cent achieved at the end
of December 2003, thanks to Dabhol and the 90-day norm, while gross
non-performing assets continued to be rather high at 7.75 per cent. With interest rates having bottomed out,
growth in profits will have to come from increased lending. The bank has set
tough targets for the current year??net profit growth has been projected at 23
per cent?-and the management will have to work hard to realise that target. |
