Winning Bizness Desk

Mumbai. The State Bank of India (SBI), the country’s largest lender, is planning to secure a $1.25 billion (Rs 10,553 crore) loan. According to media reports, this will be the largest dollar-denominated loan raised by any bank in 2024. The five-year loan will be facilitated with the assistance of CTBC Bank, HSBC Holdings, and Taipei Fubon Bank. SBI will incur an interest rate 92.5 basis points higher than the Secured Overnight Financing Rate (SOFR). The funds raised through this loan will be used to address the bank’s general business needs. The loan is being sourced through SBI’s branch located at Gujarat International Finance Tec-City (GIFT City). However, SBI has not issued any official statement regarding this development.

SBI Partners with Local Financial Institutions

SBI is collaborating with local financial institutions to raise this foreign currency loan. This move aligns with the broader trend of Indian non-banking financial companies (NBFCs) seeking dollar-denominated loans to meet their operational and expansion requirements amid stringent domestic regulations. Other financial institutions are also pursuing similar strategies. For instance, Cholamandalam Investment and Finance Company is raising $300 million, while Bank of Baroda is securing $750 million. However, despite such efforts, dollar-denominated loans raised in 2024 have seen a 27% decline, amounting to $14.2 billion so far.

Previous Loans and Financial Performance

In July 2024, SBI raised a $750 million three-year loan, indicating a pattern of reliance on international borrowing for capital requirements. The bank has shown robust financial performance this year. In the second quarter of FY 2024-25, SBI reported a standalone net profit of Rs 18,331 crore, marking a 28% year-on-year increase. This compares to Rs 14,330 crore in net profit during the same period of the previous fiscal year.

Revenue and Income Trends

For the July-September quarter, SBI’s total income surged by 15.13% year-on-year to Rs 1,29,141 crore, up from Rs 1,12,169 crore in the same period last year. Sequentially, it rose by 5.26% compared to Rs 1,22,687 crore in the April-June quarter. However, the bank’s net interest income (NII) witnessed a decline. For the July-September period, NII dropped by 5% year-on-year to Rs 39,500 crore from Rs 41,620 crore in the same quarter last year. On a sequential basis, NII was down 4% from Rs 41,125 crore in Q1 FY 2024-25.

SBI: India’s Largest Public Sector Bank

Founded on July 1, 1955, SBI is headquartered in Mumbai and remains India’s largest public sector bank. The government holds a 57.59% stake in the institution. SBI operates over 22,500 branches across India and serves more than 500 million customers. Internationally, the bank has a presence in 29 countries, with 241 overseas branches. With its extensive network and strategic financial planning, SBI continues to assert its dominance in the banking sector, both domestically and globally.