MUMBAI: The nation’s largest lender SBI, with a balance sheet north of Rs 67 trillion, will be hitting the debt capital market this fiscal to mop up Rs 20,000 crore bond sale, even though the bank has “more than sufficient liquidity with which it can lend up to Rs 12 trillion”. Over the weekend, the bank reported a street-beating set of numbers with net income rising 12.5% on-year to Rs 19,160 crore in the June quarter, primarily driven by the gains from treasury operations and better asset quality.
“Last month the board had given us a go ahead for a Rs 20,000 crore debt raising. We will raise the money this fiscal even though there is no need for funds now or in the course of this fiscal as we have sufficient liquidity to lend an additional Rs 12 trillion in fresh loans. It may not be in one tranche as well,” chairman CS Setty told TNIE on the sidelines of announcing the June quarter earnings Friday.
The bank expects lending to pick up once the uncertainty about the tariff war is resolved as corporates are holding back taking the money now. The bank has a project finance loan sanctioned, worth Rs 3.89 trillion, which is expected to be disbursed in the remaining period of the fiscal. Another component of the excess liquidity is the Rs 3.75 trillion in excess invested in government bonds under the SLR route, Setty said.
The chairman said most of the proposed Rs 20,000 crore debt raising is replacement debt of additional tier 1 capital. This proposed fund raise would be through issuing Basel-III-compliant additional tier 1 and 2 bonds to domestic investors, the bank had said in mid July. It may be recalled that the bank had raised Rs 25,000 crore in a QIP issue making it the largest ever such fund raise through this route in the country. This would add around 30 bps to the core capital which was 11% as of March 2025, said Setty.
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