SBI set to unveil major global plan today

The State Bank of India (SBI) is expected to unveil a global expansion plan in the presence of Prime Minister Manmohan Singh and finance minister P Chidambaram tomorrow on the occasion of the commencement of its bicentenary celebrations.

The plan includes increasing the contribution of overseas operations to the bank's bottomline to 25 per cent in the next three years. Currently it is at 5 per cent. The bank's net profit in 2004-05 was Rs 4,304 crore.

SBI's earlier avatar, the Imperial Bank was 10 times the size of Hongkong and Shanghai Banking Corporation (HSBC) in 1950. Since then, SBI has grown manifold to become the biggest commercial bank in the country but still it is only one-tenth the size of today's HSBC. In terms of assets, SBI now ranks 82nd among global banks.

Chidambaram, in his budget this year, had said SBI must scale up its operations and become a global bank. An internal vision document of the bank "" Operation Vijay "" has promised to increase the bank's global footprint. "We will be there in every continent," said an SBI official.

The bank intends to open a branch abroad every month from now on. These branches will come up in places such as London, Canada, Angola and Bangladesh.

SBI wants to ramp up overseas network to 75 branches from the current 67 immediately and then to 100. It has also put up a $1 billion funding for acquisitions abroad. SBI made its first acquisition overseas in Mauritius by buying 51 per cent stake in Indian Ocean International Bank Ltd in February.

The bank has assets worth $1 billion and is looking at acquiring one bank each in Asia and Africa.

The expansion is also meant to increase its overseas assets from the current $12 billion, which form just six per cent of the bank's aggregate assets.

An Act of Parliament in 1955 nationalised the Imperial Bank and it came to be known State Bank of India. SBI then had 219 branches and 14,682 employees. At present, it has 14,000 branches and nearly two lakh employees.

In 1955, SBI had deposits of over Rs 210 crore and advances book of over Rs 117 crore. In 2005, the bank's deposits have grown to Rs 3,56,643 crore and advances to Rs 2,09,742 crore.