State Bank of India may return to overseas markets

Monday, 30 January 2012 00:00 - - {{hitsCtrl.values.hits}}

Reuters: State Bank of India, the country’s biggest lender, said it could revive international fundraising plans in three to four months, in a sign it believed the euro zone crisis might be easing.

The bank, which is involved with about a quarter of all Indian bank loans and deposits, said it would launch the fundraising once it had seen international markets stabilise.

“We would like to come in as early as maybe in three or four months time,” Hemant Contractor, a Managing Director at the bank, told reporters late on Thursday during a press conference at the bank’s office in the Belgian city of Antwerp.

“Because of the slight instability in the capital markets we have deferred our plans, so once there is some stability then we will tap the markets,” he said. In November last year, he said that the bank would hold off on its fundraising plans because of conditions in the international markets, which have been under pressure because of worries over highly indebted European nations.

Contractor said the plans would be finalised after the bank’s quarterly results next month.

SBI said last year that it could raise up to $10 billion overseas as it searches for cash to lend to companies on the subcontinent to help fuel their explosive growth. “There is a demand for funds from our customers, and it’s because of that that we are thinking of tapping the markets now,” Contractor said. Even though India saw its slowest growth in national output for over two years in the quarter ended September, that was still an increase of almost seven per cent.

The bank could raise upwards of $500 million, likely in US dollars, he said.

“Depending on how the markets play out, we will decide on the currency ... but in all likelihood it will be US dollars.”