<p>The country’s premier lender State Bank of India (SBI) on Tuesday dismissed Moody’s change in the outlook on SBI’s debt (Baa3 foreign currency deposit rating) outlook with a shrug saying the rating doesn’t reflect the bank’s concern on recapitalisation needs. <br /><br /></p>.<p>Addressing reporters, SBI Managing Director and Chief Financial Officer Arundhati Bhattacharya said, “We believe our concern on the bank’s recapitalisation needs has not been reflected by it (Moody’s) and as such change in the rating outlook was totally misplaced.” <br /><br />It may be noted that ratings agency Moody’s earlier downgraded SBI’s unsecured debt rating on par with the sovereign foreign currency bond rating and changed its outlook on the bank’s financial strength rating to ‘negative’ from ‘stable’.<br /><br />Responding to a related query, Bhattacharya said, “There should not be any doubt, whatsoever, over SBI’s ability to raise funds amid the rating outlook change.” In this context, SBI Managing Director (International Banking Group) Hemant Contractor pointed out that the bank does not have any immediate plans to raise offshore bonds as there is no need for funds at the moment. To a query on the bank’s capital, Contractor said much of the capital the bank generates internally, but also accepts capital infusion from government. He pointed out that SBI made over Rs 14,000 crore profit last fiscal, saying, “We do take capital infusion from government. In effect, the bank’s capital needs are met through internal generation and also help from government.” <br /><br />Echoing similar views, another SBI Managing Director S Vishvanathan said the Union Government has enough room to reduce its stake in the bank but the market conditions need to improve for that to happen. To a related query, he said, “It (government’s stake) could come down from 62 to 55 per cent.”<br /></p>
<p>The country’s premier lender State Bank of India (SBI) on Tuesday dismissed Moody’s change in the outlook on SBI’s debt (Baa3 foreign currency deposit rating) outlook with a shrug saying the rating doesn’t reflect the bank’s concern on recapitalisation needs. <br /><br /></p>.<p>Addressing reporters, SBI Managing Director and Chief Financial Officer Arundhati Bhattacharya said, “We believe our concern on the bank’s recapitalisation needs has not been reflected by it (Moody’s) and as such change in the rating outlook was totally misplaced.” <br /><br />It may be noted that ratings agency Moody’s earlier downgraded SBI’s unsecured debt rating on par with the sovereign foreign currency bond rating and changed its outlook on the bank’s financial strength rating to ‘negative’ from ‘stable’.<br /><br />Responding to a related query, Bhattacharya said, “There should not be any doubt, whatsoever, over SBI’s ability to raise funds amid the rating outlook change.” In this context, SBI Managing Director (International Banking Group) Hemant Contractor pointed out that the bank does not have any immediate plans to raise offshore bonds as there is no need for funds at the moment. To a query on the bank’s capital, Contractor said much of the capital the bank generates internally, but also accepts capital infusion from government. He pointed out that SBI made over Rs 14,000 crore profit last fiscal, saying, “We do take capital infusion from government. In effect, the bank’s capital needs are met through internal generation and also help from government.” <br /><br />Echoing similar views, another SBI Managing Director S Vishvanathan said the Union Government has enough room to reduce its stake in the bank but the market conditions need to improve for that to happen. To a related query, he said, “It (government’s stake) could come down from 62 to 55 per cent.”<br /></p>
