Business Reporter
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| Contractor sees a robust 20% business growth per year for its branch in Qatar |
Expecting a robust 20% business growth per annum for its branch in Qatar, India’s banking behemoth, which has a balance sheet size of more than $274bn, is not only targeting Indian companies but other regional entities also, including Qatar’s.
The bank, however, will initially extend finance through syndication.
“Overall, we expect a balance sheet size of $80-100mn in the first full year of operations,” he said after his meeting with regulators, other banks and prominent entrepreneurs.
Although SBI is not targeting any specific sector, Contractor said growth opportunities, apart from oil and gas, exist in the construction sector, especially because of Qatar’s many an ambitious project such as new airport and railway line.
Big projects would bring in big construction activities and since there are many Indian companies that have expertise in executing international projects, many of them may participate in Qatar’s growth story, Contractor said. Local companies also look for finance and they could also be a potential target, he added.
“We see a lot of potential and the licence we have is for dealing with business customers. Our timing is well in line with the opportunities in Qatar considering that the economy is on a very strong growth path,” he said, adding SBI QFC is also targeting $25mn in deposits from its business customers in the first year.
Beginning with corporate banking business, Contractor said, the QFC branch, which will be housed in Alfardan Towers, will have staff strength of up to 10 people and depending on the business development, it could be scaled up.
Asked about the clientele, he said while Indian companies will be its natural target, the bank will not confine to that group since most of the loans would be done in syndication with other banks.
“Obviously, in the beginning we will be taking a minor share in these syndications and that is how we propose to do business in the initial stages,” Contractor said.
However, he said as per the Reserve Bank of India rules, the bank cannot lend more than 15% of its capital to a single entity and the local QFC regulations would also apply.
Asserting that the Middle East is a focus area for SBI, Contractor, however said though foreign operations contribute 15%-16% of the bank’s balance sheet, the proportional contribution from the Middle East is at “low single digit”.
SBI’s overseas lending stands at $32bn to $34bn and is likely to grow another $5bn to $6bn in the year ending March 2012, according to its chairman Pratip Chaudhury.
“It is the growth metrics of this region that is compelling many banks to come here and do business. Historically, ties between the Middle East and India have been very strong,” he said, adding SBI would also be opening a full commercial branch in Jeddah by next month.