State Bank of India open to acquisitions in UK

State Bank of India open to acquisitions in UK

Mumbai: State Bank of India, India’s largest bank, is looking at acquisitions of up to $1 billion in the UK and expects to maintain a 40% growth rate in its UK business, senior officials said on Thursday.

The bank’s overseas businesses, which include Europe, the US and the Middle East, would contribute over 10% of profits in 2009-10 (April-March), up from from 8% last year, chairman O.P. Bhatt told reporters.

SBI, which along with its associates controls almost a quarter of Indian bank loans and deposits, would make London the hub of its European operations, Bhatt said, pointing out that UK accounted for three-quarters of its $4 billion European business.

“We are not averse to inorganic growth. We are looking at all geographies and looking at smaller acquisitions in U.K," Bhatt said. Deputy managing director P. Chaudhuri later said any acquisitions would not exceed $1 billion.

Bhatt said SBI’s foreign operations would help Indian companies meet overseas funding requirements, including for mergers and acquisitions, as well as serving local businesses.

In 2008, Tata Motors, India’s largest vehicles maker acquired U.K.-based Jaguar and Land Rover from Ford Motors, and in 2007 Tata Steel bought Corus, Europe’s second largest steel-maker.

The bank has close to 12,000 branches across India and 132 abroad, seven of which are in the United Kingdom.

It plans to open about 40 foreign branches in the next 12 months, including five in the UK by next June.

It was also looking at expanding its branch network in the United States, including through acquisitions, Chaudhuri said.

Shares in State Bank, valued at $27.4 billion rose 0.8 percent at 2,106.70 rupees on Thursday, its highest close since Feb. 2008, in a Mumbai market that rose 0.2%.