Can SBI stay no. 1?

In the 12 months to September 30, ICICI Bank’s low-cost deposits rose 40 per cent as against the State Bank of India’s (SBI) 14 per cent. So, is SBI Chairman O.P. Bhatt losing sleep?

Not really. For one, in absolute terms, the stateowned banking behemoth is far ahead of ICICI with deposits of Rs 4,84,114 crore (ICICI’s Rs 2,28,307 crore) and 10,000 branches compared to ICICI’s 950. More reassuringly for Bhatt, who took over as Chairman in July last year, SBI’s market share has increased by 61 basis points in deposits and 11 basis points in advances in the current financial year. “These are RBI figures, and for the first time we are gaining market shares in the last two or three decades,” he says.

As for SBI’s need to expand its capital base, Bhatt says he is confident of adding Rs 15,000-Rs 20,000 crore to the bank’s chest by the end of this financial year or early next. The government, he says, has always put capital in failing banks, and here is an opportunity for it to invest in the Rights Issue, which SBI has proposed. The bank has preferred Rights Issue to Follow-on Public Offer (FPO) as “our shareholders have been very loyal to us, and we must reward them for that’’. Interestingly, SBI has not raised capital in the last 10 years. There’s another change Bhatt intends to usher in. Unlike his predecessors, he won’t be acquiring small banks.