PSBs eye overseas mkts to raise funds for expansion

Taking advantage of cheaper cost following quantitative easing in the US, major state-owned banks are lining up for overseas borrowing programmes to expand their international business.

After State Bank of India?s (SBI) $2-billion overseas borrowing plans for this year, a host of other state-owned banks like Punjab National Bank (PNB), Union Bank of India (UBI), Bank of Baroda (BoB), Bank of India (BoI) and Indian Overseas Bank (IOB) are firming up plans to access overseas markets.

UBI is set to raise $175 million from Euro markets through medium term note (MTN) route while IOB is also looking at raising $150 million in Malaysia and other Asian markets.

MV Nair, CMD, UBI confirmed bank was planning to raise $175 million in Euro currency through the MTN route in near future.

?The objective of accessing Euro market is simply to get better spread while deploying these resources. We will use it to support our branch in Hong Kong,?? he said. BoB has also hinted at raising resources from overseas markets through 10-year bonds.

BoB with a large international operations has a headroom to raise overseas funds worth $2 billion. MD Mallya, CMD, BoB said, ?We?ll observe the market before finalising our overseas fund raising plan. We must get good opportunity for the same. We may go for 10-year bonds for our future fund raising plan.??

M Narendra, CMD, IOB has said the bank is planning to raise $150 million by the fiscal-end. ?We have already raised $75 million in October. Our fund raising plan in the overseas market will either be in terms of loan or bonds. The idea is to go for asset creation overseas,?? he said. PK Chhokra, general manager & head, treasury, PNB said the bank?s plan to go for fund raising in the overseas market will not be less than than $500 million.

BA Prabhakar, executive director, BoI said the bank had already raised $500 million in April. ?We may think of raising fund in the overseas market in case we find that the credit demand was very strong in abroad,?? he said .

However, HSU Kamath, Canara Bank said the bank didn?t have any plan to raise overseas funds as of now. ?We would prefer bilateral credit-line to meet short-term fund raising requirement,?? he said. Canara Bank is planning to open office in Manama (Bahrain) and Qatar.