11 Jul SBI board to meet July 16 to consider Basel III bond fundraising
The bank’s central board will discuss the plan for issuance of capital bonds denominated in Indian rupees, SBI said in a late filing on Thursday.
Banks are allowed to issue tier-II and additional tier-I bonds compliant with Basel III capital norms.
SBI had raised a total of Rs15,000 crore through tier-II bonds and Rs 5,000 crore through additional tier-I bonds in the previous financial year. Tier-II bonds were raised in two tranches at 7.42% and 7.33%. Additional-tier I bonds were priced at 7.98% in October last year.
The board meeting comes at a time when the bank is also planning to tap the equity market to raise capital. The bank plans to raise Rs25,000 crore through qualified institutional placement of shares. This could be the country’s largest QIP if it is fully subscribed.
The objective of the capital raise is to augment the bank’s common equity tier-I or core equity capital rather than for growth purposes, SBI Chairman CS Setty had said in a post earnings press meet in May. “Even without raising additional capital, the growth will not be impacted,” Setty said.The bank’s CET-1 capital stood at 10.81% at the end of March, higher than the minimum regulatory requirement, while overall capital adequacy ratio was at 14.25%.