As the number of high net worth individuals (HNIs) in India is growing, more banks are trying to expand their private banking business in the country.
A recent report released by Capegemini-Merrill Lynch showed the number of HNIs have gone up to 1,26,700 from 70,000 in 2005, in India.
Said Soumya Rajan, managing director & head of the Standard Chartered Pvt Bank (India), ?With the number of HNIs growing, we are trying grow our private banking business in a big way. Currently, we are operating in five locations?Mumbai, Delhi, Chennai, Bangalore and Kolkata and plan to expand to other locations like Hyderabad and Chandigarh by the end of this year.?
Standard Chartered Bank, which started its private banking business in 2007, has an asset under management (AUM) portfolio of $2.5 billion.
Rajan expects the bank will have an AUM of $5 billion by 2012. The foreign bank has a client base of 1,000 and one relationship manager handles 20 households.
“We are targeting to have 1,500-1,650 households by the end of this year,” Rajan added.
Sharad Sharma, country head at BNP Paribas Wealth Management, said the bank has a clear focus on the HNI and UHNI segments, and cater to a clientele comprising successful businessmen, entrepreneurs and top level executives. ?We seek investable surplus beginning from $1 million.?
Sharma said they have recently strengthened its investments and wealth advisors team and continue to seek quality people. ?As of today, we have a team of 30 wealth advisors across the country and wealth management business is showing healthy upward trends in the first half of 2010,” observed Sharma.
The bank is ready to further consolidate in the cities where it has presence to grow strongly in terms of client coverage and assets.
The country’s second largest private bank, HDFC Bank, too, is focusing on growing their private banking business.
Speaking to FE, Abhay Aima, group head, equity, private banking at HDFC Bank, said, “For us, the revenue from private banking business has grown to Rs 700 crore from Rs 20 crore six years ago. I see it growing by over 30% like other segments of the bank.” The private bank is already present in 29 locations across the country.
“We plan to adopt the hub-and-spoke model and add two-three locations to every hub over the next financial year. Say, for example, we will use our presence in Pune to serve customers in Satara and Kolhapur,? Aima added.
Meanwhile, public sector banks like State Bank of India (SBI) is also looking at entering the wealth management space. US major JP Morgan also plans to start its private banking operations in the next 12-15 months, said Kalpana Morparia, chief executive office, JP Morgan, India.