Financial advisory firm Deloitte Touche Tohmatsu (India) is currently acting as an advisor to two state-owned banks to identify their potential takeover targets in foreign locations. Speaking to FE, Avinash Gupta, national leader (financial advisory practice), Deloitte (India), confirmed the development but refused, citing client confidentiality, to divulge more details on the proposed acquisition plans of the banks.
?These Indian banks are well-capitalised currently to opt for an acquisition in overseas emerging markets like Eastern Europe or the far east region.?
Gupta does not foresee new foreign players? entry in the Indian banking sector in days to come. ?Not many global banks are in a position to venture out of their respective countries in the current economic scenario,? he said. Commenting on the anticipated consolidation among banks in India, Gupta said, ?It?s less likely to happen in near future as promoting financial inclusion should and would get a priority over any move to merge the state-owned banks with each other in the country.
Moreover, two state-owned banks, if merged with each other, should ideally lead to expansion and not merely the addition of branches in the country.?
Gupta anticipates the interest rates to harden in subsequent quarters of the current financial year. ?The credit off-take is not likely to go up in the near future, especially when 85% of our exports are associated with bleeding economies like the US and Europe currently. Also, the domestic demand is slag at the moment,? he said.
According to Gupta, Indian banks, if solely focus on wholesale lending in the prevailing economic scenario, could squeeze their net interest margins in the subsequent quarters of the current financial year.
In India, Deloitte offers a range of audit & enterprise risk, tax, consulting and financial advisory services across thirteen cities.