State Bank of India (SBI) is chalking out plans to go retail in its international operations – reported Financial Express. A senior executive of the bank said that, such a strategy would allow the bank it to sell its syndication of loans at a cheaper rate in the foregin markets.
The bank is assessing various options for launching retail branches across overseas markets by mobilising deposits at 3 to 3.5% interest rates, through which it can imrpove its operating margins by 250-300 basis points. It is expected to start seven more branches in the UK, in addition to the existing six, over the next eight months.
SBI is preparing to commence its operations in Jeddah, Bahrain and South Africa by the end of this year. It has got regulatory approval to commence operations from three branches in Singapore. The bank is also planning to extend its network in North America under the supervision of California State chartered subsidiary of State Bank of India (California) – reported the newspaper.
The executive said: Till-date, we have been focusing more on wholesale banking in our international operations. We used to extensively indulge in inter-bank borrowings to raise funds in a bid to participate in syndications. The strategy paid us 40-60 basis points margin in the longer run,” reported the newspaper.
“However, we have no plans to buy any bank in the Far-East region or in Indonesia in the near future. We expect that in the next financial year and thereafter, the syndication activities may rise phenomenally in the Euro zone,” he added.
