on Jun 24, 2021)Mumbai: (SBI) has approved a fundraise of Rs 14,000 crore through the issue of additional tier-1 (AT-1) bonds. The board of the bank on Monday approved a proposal to raise these bonds through instruments denominated in dollars or rupees during the current financial year.
According to SBI officials, the bank has decided to hit the market to replenish the capital outflow following the maturity of bonds worth Rs 9,000 crore during the current financial year. AT-1 bonds are debt instruments but are treated as tier-1 equity as they have the capacity to absorb losses of the bank. Although the bank is adequately capitalised with a capital to risk-weighted assets ratio of over 13%, it wants to have a buffer over what is stipulated.
Earlier, SBI had forecast a growth rate of 10% for FY22. However, following the second wave, the growth targets have been reset for the first quarter and the bank is now looking at 9%.
In addition to raising capital from the market, SBI expects to raise funds through the sale of bad loans worth Rs 20,000 crore to the National Asset Reconstruction Company. The bank also expects to raise a substantial amount through the recovery of bad loans from accounts such as and DHFL.
