SBI’s annual results are expected to be declared in the middle of May.
With overseas money markets in a thaw, the State Bank of India (SBI) is reviving its medium term note (MTN) programme.
“We are planning to raise a benchmark size,” said Hemant Contractor, managing director and group executive (International Banking Group), SBI.
A benchmark issue is at least $500 million (over Rs2,500 crore).
“It will be after the annual results for the last fiscal, in the first quarter.”
SBI’s annual results are expected to be declared in the middle of May.
MTN monies are used by banks to finance the needs of their overseas branches.
Last year, India’s largest lender doubled the size of its MTN programme to $10 billion.
Meantime, the pricing of dollar bonds has improved in the past four months.
Currently a five-and-a-half year AAA-rated paper is priced at 325-365 basis points above six-months Libor (0.73%).
That’s down from 500 basis points four months back when borrowing costs rose due to global uncertainties. The situation had also led to many banks canning their MTN plans.
Indian companies raised a total of $2.1 billion in the dollar bond markets abroad during January-March, or 8.9% less than in the same period of 2011, according to Thomson Reuters data.
That number would change with other banks also queueing up.
MS Raghavan, executive director, Bank of India, said his bank’s asset-liability committee will decide the timing of the MTN issue.
“If conditions are favourable, these issues can be done in a week. If we get good rates, even we will raise funds,” he said.
P Sitaram, chief financial officer, IDBI Bank concurred. “If rates are favourable and we find willing borrowers then we will raise funds.”
Meanwhile, SBI remains gung-ho on retail loans. “They will continue to grow because the numbers are so large. It will be one of the growth areas for the bank,” said Diwakar Gupta, managing director and chief financial officer, SBI.
The bank has already extended the deadline on its concessional rates scheme on floating rate home loans to another quarter. It is also continuing with the special scheme for auto loans.
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