New Delhi: The country’s largest lender State Bank of India on Friday said it plans to raise $5 billion through offshore loans by December.
“We hope to raise $5 billion debt by December by means of foreign debt through medium-term notes (MTN),” SBI chairman Pratip Chaudhury told reporters here.
Speaking on the sidelines of a meeting between Finance Minister Pranab Mukherjee and chiefs of public sector banks here, he said the debt would be raised during the second or the third quarter of this fiscal.
“Right now, we have a total objective of $5 billion, but we would like to time the market in the second and third quarters. We will be raising the funds, but there has to be visibility of credit growth. If there is demand for assets, we will go and raise it,” Chaudhury said.
MTN is a kind of bond note with a maturity period usually between 5 to 10 years continually offered through various brokers, rather than issued all at once like other bonds.
The SBI chief said the bank is confident of maintaining its net interest margin (NIM), which is a measure of the return on a company’s investments relative to its interest expenses, at 3.5% this fiscal.
“The margins are improving. This current fiscal we have a guidance of 3.5% (NIM) and we are slightly ahead of it. Overall guidance is 3.5% and we are on track,” Chaudhury said.
He said SBI is also looking at increasing its credit growth by 16-19% in 2011-12.
Regarding recent hikes in rates, Chaudhury said: “Raising of interst rate has not impacted interest margin.”