In insurance, mobile banking

KOLKATA: State Bank of India (SBI) will enter a host of new businesses this fiscal, including a general insurance foray for which it is shortlisting a foreign partner who will have 26% stake.

A timely and much-needed move, said analysts, because closest rival ICICI Bank plans to take a quantum leap with a Rs 20,000 crore equity dilution in the next few months.

By June, SBI, India’s largest commercial bank, will also have set up a separate private equity and extended its venture capital business conducted through subsidiary SBI Capital Markets. The initial outlay for this is expected to be Rs 5,000 crore.

Mobile banking, wealth and pension management are also on the radar. “The mobile banking business will mainly have a rural focus,” chairman O P Bhatt said here on Saturday.

To meet capital requirements, SBI plans to raise about Rs 14,000-15,000 crore in the current fiscal through a mix of debt, equity and overseas borrowings.

But a decision on equity-based fund-raising - including a stake dilution in associate banks, will depend on Parliamentary approval for the State Bank of India (Subsidiary Banks Laws) Amendment Bill. “We are in talks with 7 to 8 investment bankers on the mode of equity infusion.

A decision can be expected by December this year,” Bhatt said.

“We have not decided on a follow-on public offering yet, but whenever we go to the market, it will not be for anything less than Rs 5,000 crore,” Bhatt said.

”We are very keen on general insurance. Our life insurance business is doing extremely well.  We are talking to 4-5 players and have mentally shortlisted some of them,” Bhatt said.

On the private equity entry, Bhatt said talks are currently in an advanced stage. SBI Capital Markets is a subsidiary of the bank.

Bhatt said the overall intention is to increase market share, be it in deposits or advances, by 1% every year.

“We have this key concern — of losing market share — over the last couple of years. Since September last year, SBI has actually started to gain market share. We hope t over the next few years.”