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Informist, Tuesday, Nov. 4, 2025

 

--SBI: Setting up team for M&A financing for once RBI releases final norms 
--CONTEXT: Remarks by SBI mgmt in post-earnings interaction with analysts 
--SBI: Expect to see around 10% corporate loan growth in next 2 quarters 
--SBI: SBI AMC, SBI General right candidates for listing 

 

By Shubham Rana and Sagar Sen

 

NEW DELHI – State Bank of India Ltd. is "seriously considering" listing two of its subsidiaries, SBI Mutual Fund and SBI General Insurance, and will soon begin the process, Chairman C.S. Setty said Tuesday. The timing of the listings will be determined by the respective boards of the two companies, Setty said.

 

"These two companies do not require capital at this juncture," Setty told analysts after the September quarter results were detailed. "Neither the parent requires (capital) because we just raised INR 25,000 crores (INR 250 billion). But we are serious about listing them and the boards will take a call in terms of the timing and quantum."

 

The country's largest lender reported a net profit of INR 201.60 billion for the September quarter, up 10% on year and 5.2% on quarter. SBI's net profit surpassed analysts' estimate due to a one-time gain from the proceeds of its stake sale in YES Bank Ltd. in the reporting quarter. Shares of the state-owned bank Tuesday ended 0.8% higher at INR 957.60 on the National Stock Exchange.

 

Commenting on the recent Reserve Bank of India guidelines allowing banks to finance domestic mergers and acquisitions, Setty said SBI will be interested in the right opportunities. The bank is already setting up teams for acquisition financing to ensure they are ready when the RBI releases the final guidelines.

 

Last month, the RBI released draft guidelines, proposing that banks' direct exposure to capital markets and acquisition financing be limited to 20% of tier 1 capital. The RBI has also proposed capping the aggregate capital market exposure of a bank at 40% of its tier 1 capital as recorded on Mar. 31 of the previous financial year. The aggregate exposure of a bank towards acquisition financing should not exceed 10% of its tier 1 capital, as per the RBI's draft guidelines.

 

"SBI has been doing outbound M&A (mergers and acquisitions) activity financing for quite some time. This is not new to us," Setty said. "And we will definitely take up the suitable transactions. But current guidelines are basically draft guidelines. We have to get the final guidelines and to take up any transaction." SBI will also assess its own risk appetite for acquisition financing, Setty said.

 

Asked about the corporate loans, Setty said the bank expects to see around 10% loan growth in this segment over the two quarters ending March. In the September quarter, SBI's credit to the corporate sector grew by 7.1% on year while loans to small and medium enterprises, agriculture, and retail grew by 18.8%, 14.2%, and 14.1% on year, respectively. Currently, the bank has INR 7.06 trillion of corporate loans in the pipeline, half of which have been sanctioned and the other half disbursed, the bank's management said.  End

 

Edited by Subhojit Sarkar

 

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