Public sector lender State Bank of India (SBI) chairman Pratip Chaudhuri on Saturday said the lender's margins in overseas business were under pressure.
However, non performing asset (NPA) levels of the country's largest lender in the fourth quarter last fiscal remained low compared to third quarter.
"In overseas business, our margins are under pressure. We would like to review what is our ROE (return on equity) in overseas business and what is our ROE in domestic business. Generally my sense is that the domestic business ROE is significantly higher than the overseas business," Chaudhuri told reporters on the sidelines of the 5th ICC Banking Summit in Kolkata.
ROE is a measure of how well a bank re-invests shareholder money.
"So in overseas it may not be very useful to put in more tier I (capital), but it is much more useful, productive and efficient to raise tier II bonds in overseas," the SBI head said.
Currently, the state-run bank has as many as 185 branches overseas.
Chaudhuri, however, said the lender has no plan to reduce branches abroad.
Asked about the bank's non performing assets, the chairman said NPA levels had came down during the quarter ended March 31, 2013, compared to the previous quarter.
"Our NPA in March quarter is less than that of the December quarter. So I think we had a good quarter (Q4) regarding NPA. But going forward it would be a function of the economy," he said adding NPAs were relatively less in home loans and relatively higher in commercial as well as industrial loans.
The bank's December quarter net profit rose marginally by 4% on the back of higher bad loans and lower profitability in retail lending. Gross NPA level had touched 5.30% in the quarter.