NOTE: SBINEWS DOES NOT PERMIT CIRCULATION OF ATTACHMENTS. ATTACHMENTS, IF ANY, CIRCULATED WILL BE ONLY BECAUSE OF VIRUSES. PLEASE,THEREFORE, IGNORE ATTACHMENTS IF ANY IN SBINEWS MESSAGES ************************************************************************ S&P rates SBI?s foreign currency 'BB' (Sify & Reuters) Thursday, 29 April , 2004, 10:37 Standard & Poor's Ratings Services said today it assigned its 'BB' long-term foreign currency counterparty credit ratings to India's largest commercial bank, State Bank of India (SBI). The outlook is stable. SBI's short-term foreign currency counterparty credit rating of 'B' is affirmed. At the same time, Standard & Poor's assigned its 'BB+/B' long-term and short-term local currency counterparty credit ratings to SBI, with a negative outlook. These ratings remain constrained by the sovereign ratings on the Republic of India (foreign currency BB/Stable/B; local currency BB+/Negative/B). The ratings on SBI acknowledge the bank's strong business profile, underpinned by its position as India's largest commercial bank. The bank's strategy and corporate vision to be the leading financial services group in India is soundly based, with assets of Rs 49,7750 crore (US$103.7 billion) for fiscal year ended March 2003, and a market share of about 18% of domestic deposits, and 17% for advances. SBI's operating efficiency and management information capabilities are expected to benefit from the upgrade of its IT capabilities, which will support the bank's focus on the consumer banking sector, and the introduction of new products and services. SBI's financial profile remains satisfactory, supported by its adequate asset quality and capitalization position. SBI's gross nonperforming assets are expected to edge up, after the 90-day nonperforming asset classification standard came into effect March 2004. This will, however, be mitigated by the bank's accelerated loan-loss provisioning practice. Its capitalization, as measured by adjusted common equity-to-average assets ratio of 4.68% in fiscal 2003, improved from 4.43% in the previous fiscal year. The bank's capital and financial flexibility is also supported by its reasonable internal capital generation, strong market position, and associated importance to the stability of India's financial system. SBI has the capacity to raise additional capital, if required, given its majority government ownership through the Reserve Bank of India. In addition, the bank's absolute shareholders' fund base of Rs 22,520 crore provides a sound buffer against contingencies. The stable outlook reflects the likelihood that SBI will maintain its overall sound business and financial profile. Although there has been some pressure on the bank's earnings margin in previous fiscal years, the margin remains satisfactory. The margin is also expected to stabilize, given the bank's strategy of diversifying its loan portfolio into relatively higher-yielding consumer loans, together with more active liability management of its deposits, and the retirement of its high-cost borrowings. ===== R.S.Pai, Web Address: http://rspai.tripod.com __________________________________ Do you Yahoo!? Win a $20,000 Career Makeover at Yahoo! HotJobs http://hotjobs.sweepstakes.yahoo.com/careermakeover *************************************************************************** Mailing list (sbinews@xxxxxxxxxxxxx) related information: News/articles about SBI and Banking related matters published in the print media, Internet etc will be circulated through this Mailing List. The messages in this list will help in improving awareness of SBI and its activities vis-a-vis the happenings in the Banking industry. 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