SBI says overseas business margins under pressure

State Bank of India (SBI) would review returns from its foreign and domestic business after margins overseas came under pressure, the country's largest banker said on Saturday.  

"Overseas business margins are under pressure. My sense is domestic return of equity (RoE) is significantly higher than overseas business. Therefore, it may not be very useful to put more tier I capital, but it is more productive and useful and efficient to raise tier II bonds in overseas," said SBI chairman Pratip Chaudhuri.

Speaking on the sidelines of the 5th ICC banking summit, he said the bank would review RoEs of overseas and domestic business.

SBI has about 185 overseas offices and branches spread across 34 countries contributing close to 20 per cent of total business of the bank.

"Our net profit after dividend was Rs 10,000 crore. Should I put it in India or overseas it would depend on RoE," Mr Chaudhuri said.

It may be recalled that recently the Federal Deposits Insurance Corporation (FIDC) and the California Department of Financial Institutions had asked the bank's California branch to take certain measures to ensure safe and sound operation of the bank there.