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THE country's largest bank, State Bank of India (SBI), is looking at expanding its international footprint. SBI is looking at buying a mid-sized overseas bank and the deal size could be between $1.5 billion and $2 billion, according to a senior bank official. The deal will be in line with the bank's strategy to expand its global operations.
However, SBI is yet to appoint an investment banker for the proposed acquisition. Instead, according to sources close to the development, a few mid-sized banks have actually approached SBI for a stake sale, because of the strong reputation the bank seems to have built in international banking circles. In fact, SBI went on a significant overseas acquisition spree in 2005, picking up stakes in three overseas banks. It picked up 51% in Mauritius-based Indian Ocean Bank for $8 million, 76% in Kenya-based Giro Commercial Bank for $7 million and 76% in Indonesia's PT Bank IndoMonex.
SBI already has major overseas operations with 92 branches spread over 32 countries. The bank's international loan book stood at Rs 86,267 crore as on March 2009. Its international loan book grew 18% last year, and international loans make up almost 16% of the bank's overall loans. SBI eyes countries with
strong India ties
According to sources ET NOWspoke to, SBI plans to identify countries with strong trade ties with India for the acquisition. SBI's international business group is also apparently being restructured to enable the new business model. Remittances to India typically make up a significant portion of the bank's international operations. SBI also tries to facilitate NRIbusiness ventures through its international operations.
Incidentally, SBI chairman OP Bhatt had said at the bank's annual general meeting with its shareholders last week that the bank "plans to make SBI an international brand name". SBI is also looking at setting up private equity funds jointly with sovereign entities in Oman and Qatar. He also added that a 'significant addition to the overseas network is planned for the current year'.
State Bank of India is currently in the consolidation mode with its domestic operations as well. It has already merged State Bank of Saurashtra with itself and approved the merger of State Bank of Indore. The bank is expected to carry out mergers of the other associate bankers as well.
However, SBI is yet to appoint an investment banker for the proposed acquisition. Instead, according to sources close to the development, a few mid-sized banks have actually approached SBI for a stake sale, because of the strong reputation the bank seems to have built in international banking circles. In fact, SBI went on a significant overseas acquisition spree in 2005, picking up stakes in three overseas banks. It picked up 51% in Mauritius-based Indian Ocean Bank for $8 million, 76% in Kenya-based Giro Commercial Bank for $7 million and 76% in Indonesia's PT Bank IndoMonex.
SBI already has major overseas operations with 92 branches spread over 32 countries. The bank's international loan book stood at Rs 86,267 crore as on March 2009. Its international loan book grew 18% last year, and international loans make up almost 16% of the bank's overall loans. SBI eyes countries with
strong India ties
According to sources ET NOWspoke to, SBI plans to identify countries with strong trade ties with India for the acquisition. SBI's international business group is also apparently being restructured to enable the new business model. Remittances to India typically make up a significant portion of the bank's international operations. SBI also tries to facilitate NRIbusiness ventures through its international operations.
Incidentally, SBI chairman OP Bhatt had said at the bank's annual general meeting with its shareholders last week that the bank "plans to make SBI an international brand name". SBI is also looking at setting up private equity funds jointly with sovereign entities in Oman and Qatar. He also added that a 'significant addition to the overseas network is planned for the current year'.
State Bank of India is currently in the consolidation mode with its domestic operations as well. It has already merged State Bank of Saurashtra with itself and approved the merger of State Bank of Indore. The bank is expected to carry out mergers of the other associate bankers as well.
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