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SBI says, the overseas business margins for the bank under pressure

Kolkata, Sat, 18 May 2013 NI Wire

Chairman of State Bank of India, Pratip Chaudhuri has said that the lender's margins in overseas business were under pressure. He has stated that in terms of overseas business, the margins for SBI are under pressure. He was talking to media persons here sidelines of 5th ICC Banking Summit here.

Talking to the media persons, Pratip said, "In overseas business, our margins are under pressure. We would like to review what is our ROE (return on equity) in overseas business and what is our ROE in domestic business. Generally my sense is that the domestic business ROE is significantly higher than the overseas business."

ROE is a measure of how well bank re-invests shareholder money. He further added, "So in overseas it may not be very useful to put in more tier I (capital), but it is much more useful, productive and efficient to raise tier II bonds in overseas."

Currently, the state-run bank has as many as 185 branches overseas. Chaudhuri, however, said the lender has no plan to reduce branches abroad.

Asked about the bank's non performing assets, the chairman said NPA levels had came down during the quarter ended March 31, 2013, compared to the previous quarter.

The SBI chief said, "Our NPA in March quarter is less than that of the December quarter. So I think we had a good quarter (Q4) regarding NPA. But going forward it would be a function of the economy."

The bank's December quarter net profit rose marginally by 4 percent on the back of higher bad loans and lower profitability in retail lending. Gross NPA level had touched 5.30 percent in the quarter.

(With inputs from IANS)

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