SBI eyes sale of bad assets to bolster books
08 Mar 2014
The State Bank of India (SBI) is planning to offer shares worth Rs800-1,200 crore to its employees in an employee share option (ESOP) scheme sometime in the coming 2014-15 fiscal, chairperson Arundhati Bhattacharya said.
SBI, the country's largest lender, is also considering partial sale of is huge non-performing assets of around $6,100 crore to asset reconstruction companies.
SBI's gross NPA ratio in the October - December quarter rose to 5.73 per cent from 5.30 per cent over the corresponding period a year ago.
While the bank has tentatively fixed the offer size between Rs800 core and Rs1,200 crore, the actual size of the issue may vary depending on the price at which the shares are offered, she added.
''We are looking at a Rs800 crore-Rs1,200 crore employee share purchase scheme, most probably in the next fiscal. We have sought permissions in this regard,'' Bhattacharya said on the sidelines of a programme organised by the Tata Memorial Centre in Mumbai today.
The share offer, which is planned at a discount to its market price, would be open to all employees of the bank, including its officers and clerks, she said. ''The shares will be offered at a discount. Otherwise it does not make sense and they can buy it from the market,'' she added.
The SBI chairman also said the bank has taken up NPA reduction as a major focus area, but she declined to set a target for loan recovery, restructuring or hiving off to ARCs.
''We are considering some proposals to sell NPAs in the current quarter (January-March 2014). This is the first time we would be selling NPAs to ARCs'', she said.
SBI's gross NPA ratio in the October-December quarter rose to 5.73 per cent from 5.30 per cent over the corresponding period a year ago.
The bank had restructured standard assets worth Rs6,100 crore during Q3 and reportedly has a loan restructuring worth Rs9,500 crore in the pipeline.
Bhattacharya said SBI was not seeing any increase in lending despite some turnaround and easing of stress in some sectors, especially the power sector.
SBI shares were trading at Rs1,654 on the Bombay Stock Exchange in Friday afternoon trades.
