Bangalore, May 28 (IANS) India's largest state-run bank, State Bank of India (SBI), plans to float a $1-billion (Rs.5,500 crore) debt bond issue by August to raise funds from the market, a top official said Monday.
"We are planning to come out with a medium-term debt bond issue during the next three months to the tune of $1 billion as in the past, though we have not finalised the exact amount to be raised not as capital but debt," SBI chairman Pratip Chaudhury told reporters on the margins of a function here.
Asserting that the bank's capital adequacy ratio (CAR) at 9.67 percent was comfortable, Chaudhury said the bank was not looking at raising capital under tier-1 but debt to fund its expansion plans.
"The debt amount is yet to be decided although we went to the market in the past to mobilise not less than $1 billion. We are yet to finalise the dates as we have time till August," Chaudhury said after donating a Rs.8.40-lakh school bus to Angavikalara Ashakirana Trust at Davangere, about 260 km from here, as a gift from the bank's regional office.
Making a forward-looking statement on the bank's performance this fiscal (2012-13), the chairman said profitability would be good as the net interest margin is projected to be at 3.75 percent or above as against 3.85 percent in last fiscal (2011-12).
"We always under promise but try to perform better than guidance we give at the beginning of fiscal despite some stress on the asset quality, especially from lending to agriculture and SME (small and medium enterprises) sectors," Chaudhury said.
"Lending to agriculture as our priority sector will depend on rainfall during the southwest monsoon from June to September though it was good last fiscal, resulting in good foodgrain production and four percent contribution to the gross domestic product (GDP). We have to see how the monsoon fares this fiscal," Chaudhury added.
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