BENGALURU (Reuters) – State Bank of India (SBI.NS) <SBI.NS> said on Friday it will consider raising additional tier 1 capital by issuing debt in rupees or other convertible currency, as the country’s largest lender looks to fund growth amid a rebound in demand for loans.
A pick up in India’s economic activity after a pandemic lull has boosted loan disbursal at lenders, despite interest rates rising since May. India’s economy grew at 6.3% in July-September and is seen growing by 6.8% this financial year.
Credit growth for the industry was around 17% year-on-year as on Nov. 18, central bank data showed. SBI reported a 20% jump in loans in the second quarter.
Over the last two weeks, Indian banks raised $2 billion through infrastructure bonds, anticipating a revival in private capital expenditure and increased government spending. SBI raised about $1.22 billion.
SBI’s board will meet on Dec. 14 to consider the capital raise, which could be through a public offer or a private placement, the bank said in an exchange filing.
(Reporting by Chris Thomas in Bengaluru; Editing by Savio D’Souza and Dhanya Ann Thoppil)
