SBI may miss foreign assets growth target

The country's largest bank, State Bank of India (SBI), is likely to lower its target for growth in overseas assets. The bank had earlier planned to grow its international assets to 20 per cent of the total assets by 2008.

The bank now finds the target unattainable as its assets in India are growing at a rate not really envisaged earlier. Its overseas assets are currently just 6 per cent of the total assets.

The growing domestic business opportunities are making SBI review its target set for international operations. It is likely to lower the targeted growth of 20 per cent in its global business in overall assets. "SBI would need to review the overseas business target," the bank's chairman A K Purwar said.

SBI saw around 30 per cent growth in loan assets in 2004-05 and the trend has continued in the current year as well. In the second quarter of 2005-06, the state-run bank reported a 31.16 per cent growth in advances to Rs 2,38,351 crore from Rs 1,81,721 crore, posted in the corresponding quarter of the last financial year.

SBI recently acquired Giro Commercial Bank in Kenya and Mauritius-based Indian Ocean International Bank. The bank has plans to raise $2 billion through issue of medium-term notes to fund expansion of international operations, including that via acquisitions.

The net profit from the bank's foreign branches increased to $46.51 million in 2004-05 from $35.88 million a year earlier. Assets of its foreign branches at the end of March 2005 were $9,114.03 million, up from $6,276.20 million a year ago.

SBI's customer deposits at overseas branches increased from $2,017.60 million to $3,257.24 million as on March 31, 2005. The bank's net interest income at foreign operations had increased to $65.49 million in 2004-05 from $48.49 million a year earlier.