[sbinews] SBI open to local bank buyout if it adds value (The Telegraph)

  • From: "Rajendra S. Pai" <rs.pai@xxxxxxxxx>
  • To: <sbinews@xxxxxxxxxxxxx>
  • Date: Thu, 2 Dec 2004 18:44:52 +0530

SBI open to local bank buyout if it adds value
(The Telegraph)

Calcutta, Dec. 1: State Bank of India (SBI) may acquire a bank in the
country as part of the consolidation drive in the sector.
Talking to The Telegraph, SBI managing director Chandan Bhattacharya said,
"We have received one or two proposals. We are, however, extremely
selective. We will only look at a bank that will add value to us."
SBI will not consider branch network while acquiring a bank. "We have a huge
branch network. So while considering a merger, we will look into other
aspects, which will strengthen our presence," Bhattacharya said.
The bank also plans to buy out one or more foreign banks in the current
SBI is currently carrying out due diligence of banks in southeast Asia, Far
East, Africa and the US.
"International consultants are currently carrying out the exercise. We are
looking at small banks with good business position. We will not go for big
banks. We may not be able to gulp down big banks. We may acquire more than
one bank," Bhattacharya said.
SBI is currently present in 50 countries. "Our target is to increase our
global business to 10 per cent of our overall operations by 2005-06," he
The bank is also taking steps to enhance project financing. Projects worth
Rs 10,000 crore has been sanctioned by November and the actual disbursal is
Rs 2,000 crore.
"We have recently restructured our credit delivery system. With the new
model, credit is sanctioned within two to three weeks. Earlier, it took at
least four weeks to sanction a proposal. This has not only expedited the
credit sanctioning decision but also boosted our advance portfolio. Credit
growth has been 25 per cent year-on-year, the highest in last 10 years and
also the highest among all banks. We hope to keep the same pace by
March-end," he said.
On the higher home loan rates, Bhattacharya said, "There will be hardly any
impact on our housing retail portfolio due to higher rates. Since the rate
of inflation is higher, the rates have moved up."
Regarding the seven associate banks, he said each of them are performing
well and are strong in their own regions. "We do not see any physical merger
of these banks. However, there will be a virtual merger - in terms of
technology, communication and accounting standards," he said.
SBI has 4,500 ATMs and witnesses half-a-million transactions per day. The
total transaction is Rs 2,000 crore per day.

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