SBH awaits UAE Central Bank nod to open office in Dubai

State Bank of Hyderabad, or SBH — a subsidiary of State Bank of India, the country’s largest lender — seeks to open a representative office in Dubai, the bank’s managing director Bhagavantha Rao said.

By Issac John

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Published: Fri 20 Sep 2013, 10:15 AM

Last updated: Fri 3 Apr 2015, 3:13 AM

SBH, which has approached the UAE Central Bank for approval, hopes to set up the office, its first overseas presence, before the end of this year to ensure greater liaison with non-resident Indians, or NRIs, in the Gulf, Rao said at a Press conference.

Dr V. Suresh Babu, chief general manager; Subbaraman K.S., general manager; and Amier Hamsa, deputy general manager, all of SBH, were also present at the event.

Rao, ruling out any immediate SBH merger with its parent SBI, said the proposal of consolidation make economic sense as the size of Indian banks was not comparable to the biggest banks in the world.

SBH is one of the five subsidiaries of SBI, which are expected to merge with SBI over the next 10 years. The other four include State Bank of Patiala, State Bank of Mysore, State Bank of Bikaner & Jaipur and State Bank of Travancore.

“Once the complete consolidation takes place, SBI will rank among the world’s top 30 banks,” he said.

In recent times, two associate banks — State Bank of Saurashtra and State Bank of Indore — had merged with SBI.

Rao said SBH, which offers a wide spectrum of services to its NRI customers, has a very large clientele in the Gulf. In order to facilitate smooth transfer of funds from GCC, the bank has entered into rupee drawing arrangements with six exchange houses and one bank in the Gulf.

SBH has correspondent relationships with 21 banks worldwide, providing a full array of services — global payments, collections, remittances and other foreign exchange transactions.

SBH, which has over 1,500 branches across India, is planning to open 83 new branches during this financial year. The bank has a tie-up for remittances through MoneyGram Xpress Money, where money can be encashed through designated branches and Web-based online products to send remittances from the United Kingdom, the United States, Canada and the Gulf through SBI Global Link Services.

In fiscal 2012-13, SBH’s total business expanded by 16.89 per cent to touch $35 billion as total deposits hit $20 billion and advances rose to $15 billion, Rao said.

The lender posted an operating profit of $465 million and net profit of $208 million. Net non-performing assets, or NPAs, increased to 1.61 per cent from 1.3 per cent last year.

SBH attributed the increase in NPAs to slippages in the commercial, roads, power, and gems and jewellery segments.

Overall, the Indian banking industry is robust with a credit growth of 15 per cent in 2014 as projected by the Reserve Bank of India, Rao pointed out.

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