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State Bank of India to expand in SA

10 September 2014 A. Krishna Kumar, State Bank of India

The State Bank of India (SBI) plans to grow its business in Africa with the focus on corporate business, South African customers and secured SME business. Mr. A. Krishna Kumar, managing director and group executive (International Banking) was in South Africa last week and said the bank is now geared for expansion and growth.

He said that during the bank’s 17 years in SA and having established eight branches, the focus was on the Indian community and corporate market. This has covered trade and corporate finance for a number of local SA companies in industries such as power & energy, infrastructure, automotive, mining, iron & steel and industrial-related markets, as well as limited mortgage and vehicle finance.

“We are now looking at expanding into the larger community in SA and further into the corporate market,” he said. “As a result, we will be increasing our asset base from the current R4.5-billion to about R10-billion over the next few years. Local return on assets is 2-3%, which is high based on global standards.” Globally, the group’s asset base is $392-billion.

In the rest of Africa, the bank has operations in Botswana, Mauritius, Cairo and Nigeria through SBI stake in Sterling Bank.

Mr Kumar said he is confident in the SA economy and sees significant potential. The bank projects 2% GDP growth for South Africa this year.

He said the group’s worldwide growth strategy is based on organic growth by partnering with existing banks rather than by acquisition. “In the time the bank has been in SA, we have never shown a loss. Profits are retained in SA, and never taken out. We want to build a solid institution in SA and are here for the long-term,” he said.

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