[sbinews] SBI raising $250 million to fund overseas operations (Business Standard)

  • From: rs.pai@xxxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Sat, 20 Mar 2004 16:00:16 +0600 (IST)

SBI raising $250 million to fund overseas operations 
(Business Standard)

Our Banking Bureau in Mumbai 
Published : March 20, 2004 

The State Bank of India (SBI) is raising a $250 million foreign currency loan 
for funding its overseas operations. 

It will be a short-term facility maturing in 364 days and has been priced at 
approximately 32-33 basis points over the London inter-bank offered rate 
(Libor), banking sources said. 

The Citigroup is arranging the loan. An SBI executive said the bank has 
centralised its overseas borrowing plans to cut down the cost of funds. 

?Our overseas balance sheet grew by over 40 per cent last year. This money can 
be disbursed to Indian companies looking for dollar loans. The assets will be 
booked overseas,? he said. 

Bankers active in overseas syndication of foreign currency loans said that the 
rates compare well in the international market. 

This is because the ongoing rates for such a tenure is around 40 basis points 
over the Libor. For the sake of comparison, in rupee terms the rates come to 
2.25 per cent if the loan has to be fully swapped into rupees. 

However, in this case, the bank does not need to do a swap as the loans will be 
officially raised by one of the international branches of SBI and will be 
parked overseas. 

Most of the international branches of Indian banks are facing shortage of 
dollar funds as most of it has been on lent. 

According to banking sources, the fund will be mobilised from its branches in 
Europe and East Asia. 

For 2002-03, foreign offices of SBI made a net profit of Rs 109.90 crore and 
have mobilised $138.22 million long-term foreign currency funds by way of 
structured deals worth $138.22 million for providing long-term funds to the 
banks? foreign offices and reducing asset liability mismatch. 

While the foreign subsidiaries had a drop in profit, the joint ventures abroad 
showed improved performance. 

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