The Hindu : Business : SBH puts IPO plan on hold

Online edition of India's National Newspaper
Friday, Aug 31, 2007
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Business

SBH puts IPO plan on hold

Special Correspondent

HYDERABAD: State Bank of Hyderabad (SBH) is likely to merge with State Bank of India (SBI) by December. “This is my gut feeling, though no roadmap on the merger has been prescribed by SBI as yet,” Managing Director of SBH, Amitabha Guha, said.

Addressing a press conference here on Thursday, Mr. Guha said SBH had put its plan to go in for an initial public offering (IPO) on hold until December. If the merger was getting delayed by 12 to 18 months, the bank might go for an IPO.

He said the management would clarify the apprehensions of staff unions with regard to the merger. All the subsidiary banks of SBI would merge with it by 2010 to form into a large entity.

SBH would become Basel II-compliant by March 2008 and internally by September this year. Attributing the marginal decline in the capital adequacy ratio to increase in business, Mr. Guha said the bank was comfortable.

On reverse mortgage loans, he said the bank was studying the market situation and if the response was encouraging, it would commence that business. SBH would launch a drive on September 1 for opening 3.25 lakh new accounts and was expecting a business of Rs. 5,000 crore from this, Mr. Guha said.

The bank posted a total business of Rs. 73,500 crore in the first quarter against Rs. 57,828 crore in the corresponding period last year. The net profit went up to Rs. 93.27 crore from Rs. 78.32 crore.

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