SBI In Talks For Overseas Acquisitions In Asia, Africa

Kolkata, May 28 | Updated: May 29 2004, 05:30am hrs
The State Bank of India (SBI) is looking forward to acquiring scheduled commercial banks overseas, according to its chairman AK Purwar.

We are seriously considering taking over scheduled commercial banks in countries like Bangladesh, Indonesia, Myanmar and Sri Lanka in Asia and Angola and Senegal in Africa, Mr Purwar said at a press conference here Friday after announcing the financial results of the bank for the fiscal to March 31, 2004.

He said SBI was already holding talks with a number of banks in these countries. However, he refused to disclose either the identities of these banks or the probable cost.

The bank is currently having 51 overseas offices in 28 countries. During the fiscal to March 31, 2004, the banks overseas operations recorded $40 million in revenue, up from the previous fiscals figure of $25 million. If we are able to firm up our overseas expansion plans during the current fiscal, I expect the figure to at least double by the end of the fiscal, Mr Purwar said.

Mr Purwar ruled out the possibility of offering another voluntary retirement scheme in the near future. However, he added, the bank was considering an exit option for those employees who had never received a promotion. This exit option is still at the planning stage, Mr Purwar added.

He said the bank was undertaking business process re-engineering projects and had engaged McKinsey & Co as advisor to the project.

McKinsey has been coming out with its reports in parts and already we have implemented some of their suggestions in departments like the national banking group, corporate banking, medium and small-scale industries advances and the mortgage sector, he said.

Asked whether there was an immediate possibility of merger of the seven associate banks of SBI with the parent, Mr Purwar replied that they would continue to operate as independent bodies.

We have already synergised many of their operations like implementation of business process re-engineering, common technology platform and cross-selling of products. In such a situation, merger of seven associate banks with SBI is not on our agenda, Mr Purwar said.

According to him, the objective of this exercise is to strengthen SBIs ability to acquire new customers, build lasting relationships with existing customers and to increase customer satisfaction through world-class service.

Claiming that cross-selling of products from SBI Life Insurance Co. Ltd and SBI Funds Management Pvt Ltd has commenced in right earnest through the banks branch network in the entire group, Mr Purwar said that during 2003-04, SBI have covered over 1,28,700 lives and collected premium of Rs 82 crore.

Mr Purwar informed that under the Securitisation & Reconstruction of Financial Assets & Enforcement of Securities Interest Act, 2002, SBI has served notices to 12,553 defaulters involving an amount of Rs 5,114 crore, effecting a recovery of Rs 130 crore till March 2004.

We have also sold 76 assets involving dues of Rs 570.35 crore of principal amount to Asset Reconstruction Co of India Ltd (ARCIL) during 2003-04 at an offer price of Rs 162.33 crore. Depending on how far ARCIL is being able to dispose of these assets, we might go on for an higher sale of such assets in 2004-05, Mr Purwar said.

He also claimed that SBIs credit card business, which was 17 per cent of the total credit cards market in India, was performing quite well.