SBI plans to buy South African bank

The State Bank of India (SBI) has begun its due diligence to buy a small or medium size bank in South Africa, the window to the African continent. A mid-sized South African bank, Capitec, with an asset of around $350 million (Rs 1,400 crore) and 280 branches is a potential target. When contacted, SBI’s South African CEO Vijay Jasuja confirmed that the bank might take the inorganic route to make its South African business profitable. “We need to have at least 20 branches in South Africa to make our retail venture profitable here. If we try to expand in an organic manner, it may take one and half years, or even more. the banking business has been a profitable proposition in the country because of high service charges here. For an ATM withdrawal of 1000 rand, for example, a customer needs to pay as high as 14 rand to the bank. Similarly, service charges for credit card, telephone banking, and other business banking services are quite high compared to India." The SBI, which has three branches in South Africa, has been present in the country for the last 10 years.