State Bank of IndiaBSE 1.29 % (SBIBSE 1.29 %) will open more branches in Nepal and consider options to re-enter Vietnam under a three-year goal to grow its international operations to as much as 15 percent of total business, a senior executive said.

India's top lender, with assets of more than $500 billion, was catapulted into the league of the top 50 global banks this year after it merged five subsidiary banks with itself.

But mergers and acquisitions are expected to play only a tiny role as SBI seeks to ramp up growth in the overseas business, which now makes up about 11 percent of all operations. Instead, it will rely on organic growth and ensure profitability is not forsaken.

SBI, which is present in 35 countries but has more than half of its 206 offices in Asia, aims to increase the number of offices in neighbouring Nepal to 100 in the next one year from 88 currently to better tap a market it considers "under-penetrated" for banking, said Siddhartha Sengupta, a deputy managing director who leads the bank's international business.

The Indian government majority-owned bank is also looking at options to re-enter Vietnam, where it closed its office long ago, possibly through a partnership, Sengupta said, noting the Vietnamese economy, and trade between the Southeast Asian nation and India, were growing rapidly.

"We had an Asian focus. But we are trying to make that focus sharper," Sengupta said in an interview with Reuters.

"In terms of inorganic growth, whatever our aspirations are would be far smaller compared to what we have seen in the domestic market. We have a limited dollar balance sheet."

The Indian lender's overseas push comes at a time when rivals in China, Japan and Southeast Asia are expanding outside their home nations and have made far deeper inroads into Asia, often through M&As.
SBI's overseas growth plan also comes at a tricky time for India lenders who have been burdened with a record $146 billion in bad loans.

SBI's overseas growth plan also comes at a tricky time for India lenders who have been burdened with a record $146 billion in bad loans.
Sengupta said the overseas growth would be in a "risk-mitigated" fashion and not at the cost of profitability. The expansion may not lead to a substantial rise in the total number of international offices as SBI is also shutting unprofitable ones, he said.

Sengupta said the overseas growth would be in a "risk-mitigated" fashion and not at the cost of profitability. The expansion may not lead to a substantial rise in the total number of international offices as SBI is also shutting unprofitable ones, he said.