The country’s largest bank, State Bank of India, plans to raise upto Rs 14,000 crore through additional tier-I bonds (AT1 bonds) in current financial year (FY22) to enhance capital adequacy profile.
However, the Central Board approved the capital raise by way of issuance of Basel lll-compliant debt instruments.
The bonds are proposed to be raised in Indian or US currency.
Regulatory filing read as
“The central board of the bank at its meeting held today on June 21, 2021, accorded approval for raising capital by way of issuance of Basel III compliant debt instruments in USD and/or INR during FY22.”
Under this, the bank plans to raise fresh additional tier I capital up to an amount of Rs 14,000 crore subject to the government of India concurrence, it added.
Fund Raised and Redeem
During FY21, SBI mopped up ₹6,500 crore via Basel III compliant debt instruments under AT-1 and ₹20,931 crore via Tier – 2 capital, as per the bank’s annual report.
During FY21, the bank redeemed AT-1 Bonds aggregating to ₹200 crore and Tier-2 Bonds aggregating to ₹16,647.83 crore.
Performance
The capital adequacy position of the bank improved from 13.06 per cent in March last year to 13.74 per cent in March 2021.
The CET (Common Equity Tier) 1 capital and AT-1 capital ratios put together increased by 44 bps to 11.44 per cent.
The bank also increased its Tier-II capital base to 2.30 per cent in March 2021 from 2.06 per cent the previous year.
(with Inputs from Money Control)
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