SBI board approves Rs 11,000 cr capital raise via AT1, tier-II bonds

Money to be raised in rupees, dollars or other convertible currency; lender's CAR at 13.83%, with tier-I of 11.42% and Tier-II of 2.41%, March-end

The country’s largest lender, State Bank of India, plans to raise up to Rs 11,000 crore via additional tier-I and tier II bonds to meet regulatory requirements and support business growth.

SBI's board of directors approved the plan to raise capital by ways of issuance of Basel III company debt instruments in rupees, dollars or any other convertible currency, the bank informed BSE.

The board nod is for raising fresh AT1 capital of up to Rs 7,000 crore, subject to concurrence from the government of India, and fresh tier-II capital of up to Rs 4,000 crore, the lender said.

SBI's capital adequacy ratio stood at 13.83 per cent with tier-I of 11.42 per cent and Tier-II of 2.41 per cent at end of March 2022.

Early this month, public sector lender Punjab National Bank raised Rs 2,000 crore in capital vis tier-I bonds at a fine rate of 8.75 per cent.

Other public sector lenders have lined up fund-raising plans as well. Union Bank of India and Canara Bank plan to raise Rs 4,000 crore through the issuance of AT1 bonds.

Last December, SBI had raised about Rs 3,974 crore through AT1 bonds. The coupon for these bonds was fixed at 7.55 per cent, 17 basis points cheaper over the last issuance in September 2021, when the bank had issued AT1 bonds amounting to Rs 4,000 crore at 7.72 per cent.