State Bank to provision $10 mn for sub-prime

April 23rd, 2008 - 8:51 pm ICT by admin  

Mumbai, April 23 (IANS) State Bank of India (SBI), the country’s largest scheduled commercial bank, will provision $10 million to account for the notional losses it has suffered due to the crisis in the global financial markets, bank chairman O.P. Bhatt said Wednesday. “Due to the sub-prime abroad, we will have to provision for a mark-to-market loss of $10 million,” Bhatt told reporters on the margins of a conference on financial markets here.

He said some of the bank’s clients may also have to make a provision of Rs.6-7 billion because of the losses suffered under foreign exchange derivatives contracts.

Bhatt said while several Indian companies were “dragging banks to court over foreign exchange derivatives exposure, none of the SBI customers have sought any legal action over this issue”.

“We are not seeing the value of investments going down.”

The bank has an estimated 130 million clients.

Talking about the loan portfolio, Bhatt said the growth was pegged at 22 percent for 2008-09, but added: “The non-performing assets graph is rising and will rise further.”

He, however, pointed out that in housing loans, there was consistency, specially amongst the first time housing loan seekers.

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