SBI Raises Rs50 Bn Through Additional Tier 1 Bond Issuance

The tenor of the bonds is perpetual with a call option after 10 years and every anniversary thereafter.

Dinesh Khara, Chairman SBI

FinTech BizNews Service   

Mumbai, January 17, 2024: State Bank of India (SBI), the country’s largest lender, has raised Rs5,000 crores today through its second Basel III compliant Additional Tier 1 bond issuance for the current financial year at a coupon rate of 8.34%. The tenor of this bonds is perpetual with a call option after 10 years and every anniversary thereafter.

The issue attracted overwhelming response from a wide range of investors with 108 bids of Rs. 5,294 crores and was oversubscribed by about 2.65 times against the base issue size of Rs 2,000 crores. The investors were across mutual funds, provident & pension funds, banks, insurance companies, etc.

Dinesh Khara, Chairman, SBI, stated that “The tight pricing and the diverse investor base for an instrument which has its own challenges shows the trust investors place in the Bank.”

Based on the response, the Bank has decided to accept bids of Rs5,000 crores at a coupon rate of 8.34% payable annually. The Bonds were rated AA+ with stable outlook by CRISIL and ICRA. The issuance is significant as the Bank has been able to diversify and raise long-term non-equity regulatory capital.

About State Bank of India:

State Bank of India is the largest commercial bank in terms of assets, deposits, branches, customers, and employees. It is also the largest mortgage lender in the country which has so far fulfilled the home buying dreams of over 30 lakh Indian families. The home loan portfolio of the bank has crossed Rs. 6.72 lakh crore. As of September 2023, the bank has a deposit base of over Rs. 46.89 lakh crore with CASA ratio of 41.88% and advances of more than Rs. 34.11 lakh crore. SBI commands a market share of 27.4% and 19.3% in home loans and auto loans respectively. SBI has the largest network of 22,400+ branches and 65,600+ ATMs / ADWMs in India with 79,647 BC outlets. The number of customers using internet banking and mobile banking stand at 122 million and 107 million respectively. With SBI’s digital strategy right on track – the bank witnessed 61% of new savings accounts being opened through the integrated digital and lifestyle platform YONO in Q2FY24. YONO, which has more than 6.72 crore registered users, witnessed 36 lakh new YONO registrations in Q2 FY24. In terms of digital lending, the bank disbursed pre-approved personal loans worth Rs. 7,489 crores through YONO in the same period. SBI also has the highest number of followers on Facebook and Twitter amongst all banks worldwide.

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