Tuesday, 19 April 2016

SBI Might Shut Unviable Branches Abroad After Review

Mumbai: On Monday, State Bank of India (SBI), which is the nation’s largest lender said that it will undertake a detailed review of its international operations and may close some non-lucrative branches.


SBI Managing Director for Corporate Banking B Sriram said: “We do a yearly review of our international operations, but this time we are doing a medium-to-long-term strategic review of our foreign operations.” “We will come out with medium-term targets which shall include business, profit, contribution to the book in terms of risks as per regulations and compliances and branch strategy,” he further added. The new corporate structure, a subsidiary, would be in place by March 2017, Sriram added.

Sriram said the review will be completed over the next two months and a report will be presented to the board. As part of the review, the bank is looking at closing certain non-lucrative branches which have not performed as per expectations.
In Britain, SBI has been asked by the local regulator to convert into a subsidiary rather than continue as a branch by March 2017, he said, adding the wholesale banking will continue as a branch. Going by revenues, he said Britain, US, Hong Kong, West Asia and Japan see good business. On the margins front, he said Nepal, Maldives and Bangladesh are very lucrative geographies, and added that generally the spreads are in sync with the country’s sovereign ratings.
At the end of December 2015, SBI had a foreign network of 190 offices spanning 36 countries.


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