Is SBI Set to Raise $3 Billion from the Foreign Market in FY26?
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Synopsis
SBI's bold move to raise $3 billion in FY26 could reshape its funding strategy. Discover how this plan will enhance credit growth and its implications for the banking sector.
Key Takeaways
- SBI is set to raise $3 billion in long-term funds in FY26.
- The funds will be sourced via public offerings or private placements.
- This initiative supports credit growth for domestic and foreign operations.
- SBI's asset quality has shown improvement with reduced NPAs.
- The bank declared a Rs 15.90 dividend per share for FY25.
New Delhi, May 20 (NationPress) The State Bank of India (SBI) revealed on Tuesday that its board has sanctioned a proposal to secure up to $3 billion in long-term financing throughout the financial year 2025-26.
This premier public sector bank indicated that the capital will be raised through either a singular or multiple tranches via public offerings or private placements of unsecured notes.
During its Executive Committee meeting on Tuesday, the Central Board approved plans to assess and finalize long-term fundraising options, potentially reaching up to $3 billion under Reg-S/144A. This could involve public offerings and/or private placements of senior unsecured notes in US dollars or other prominent foreign currencies during FY 2025-26, as conveyed by SBI in a stock exchange notice.
This initiative is aligned with SBI's strategy to acquire funds at reduced interest rates to facilitate credit expansion in both domestic and international operations.
Previously, SBI had announced a fundraising target of up to Rs 25,000 crore in FY26 through qualified institutional placements (QIP) or follow-on public offerings (FPO).
In the fourth quarter of 2024-25, SBI reported a standalone net profit of Rs 18,642.59 crore, reflecting a 10 percent decrease compared to Rs 20,698.35 crore in the same quarter of the previous year.
Total income surged to Rs 1,43,876 crore in the quarter, up from Rs 1,28,412 crore in the corresponding period last year.
The asset quality of the government-owned bank improved, with gross non-performing assets (NPAs) dropping to 1.82 percent of total advances in the fourth quarter, down from 2.24 percent as of March-end 2024. Likewise, net NPAs fell to 0.47 percent from 0.57 percent.
SBI's net interest income (NII) was reported at Rs 42,774 crore.
For FY25, SBI's operating profit surpassed Rs 1 lakh crore, growing by 17.89 percent year-on-year to Rs 1,10,579 crore, while the operating profit for Q4FY25 increased by 8.83 percent year-on-year to Rs 31,286 crore.
The bank declared a dividend of Rs 15.90 per share (equating to 1,590 percent) for FY25, with the record date set for May 16 and the payment date on May 30, 2025.
On Tuesday, SBI's share price closed 1.2 percent lower on the BSE, at Rs 785.35 per share.
Point of View
I believe SBI's proactive approach to raising funds demonstrates its commitment to enhance credit availability. This strategic maneuver will not only benefit the bank but also contribute positively to the broader economy. It's a crucial step in ensuring stability and growth in India's financial landscape.
NationPress
01/06/2025
Frequently Asked Questions
What is SBI's plan for raising funds?
SBI plans to raise up to $3 billion in long-term funds through public offerings or private placements of unsecured notes during FY26.
How will the funds be utilized?
The raised funds will support credit growth across both domestic and international operations.
What are the expected benefits of this fundraising?
This initiative aims to secure lower interest rates, improving SBI's financial standing and competitiveness.
When will the fundraising take place?
The fundraising is expected to occur during the financial year 2025-26.
What is SBI's recent financial performance?
SBI reported a standalone net profit of Rs 18,642.59 crore in Q4 2024-25, indicating a 10% decline from the previous year.
