India's largest nationalised bank State Bank of India (SBI) aims to achieve a growth of 18.5 percent in total business in the financial year 2005-06.

The company has set a target of 23 percent growth in advances in 2005-06 and 16 percent in deposits with an emphasis on agriculture, retail, international banking, credit finance, small and medium enterprise and mid-corporate, SBI chairman A.K. Purwar said here Friday.

The bank is also eyeing acquisition of the UTI Asset Management Company if the price is attractive, Purwar told reporters.

The SBI has registered 16.94 percent growth in 2004-05, recording a net profit of Rs.43.04 billion.

In 2003-04, the net profit was Rs.36.81 billion.

The bank's March quarter net profit increased 22.13 percent to Rs.10.65 billion rupees from Rs.8.72 billion in the period in 2003-04.

Purwar said the total business is expected to go up by 18.5 percent to Rs.6,716.88 billion in fiscal year 2005-2006.

SBI shares Friday advanced 1.63 percent to close at Rs.649 at the National Stock Exchange.

"This year, we may come out with a Tier-II issue. The details are being worked out and we may come out with a preferential issue, depending on the RBI's (Reserve Bank of India) permission. A part of the offering could be raised through overseas issue," Purwar said.

"I expect interest rates to be stable in the short term, but factors like inflation and crude oil prices will determine long-term interest rates," he said.

"The biggest challenge before SBI is how to utilise manpower in an effective way though we do not have any plans to introduce VRS (voluntary retirement scheme)," he said.

--Indo-Asian News Service