French major Societe Generale (SG) has decided to expand its private banking operations in India. The bank plans to spread out its reach, introduce innovative products and recruit more employees.
Executive director and head of private banking with Societe Generale Nipun Mehta said currently the bank has about 47 employees in the private banking space that includes relationship managers, compliance, legal advisory and the operations team.
?We will expand the team and recruit in a big way in another 2-3 years? time. However, for this year we will add about seven employees to our private banking business,? he said.
In Societe Generale 25-30 clients are handled by one relationship manager. Mehta said that the bank will focus on high net worth individuals with an investable surplus of above $0.5 million in the country.
?This year we will focus on northern, western and a bit of the southern regions of the country,? he said.
The bank said the asset management has been hit by recession and confirmed risk aversion of investors. As a result, the level of net outflow in the second quarter of 2009 was euro 1.8 billion, or a total of euro 3.4 billion in first half of 2009. Despite private banking?s strong performance with an inflow of euro1.3 billion in second quarter of 2009, asset management experienced an outflow due to the capital withdrawals observed in alternative investment activities, whereas, traditional investment activities were stable.
The bank is focusing on all kinds of investment products like third party products, fixed income and structured products across all asset classes.
?We are looking at expanding our current product line and are coming up with innovations. However, it all depends on when do we get the approvals,? Mehta said.
Mehta noted that apart from India, the bank will also focus on Hongkong, Brazil, China and the Middle-East.
While the private banking business has hiccups owing to the global turmoil, Mehta is confident that the bank will sail smooth through the tide.
?Last year the whole world saw an erosion of wealth. None of the investors were paid off. However, there has been a bit of upsurge in the last four months. There is a bit of recovery however, as compared to 2007, the earnings are still low,? he said.
Mehta also noted that the sentiments are now turning positive as most sectors in the economy are now showing signs of revival.
SG will also continue to focus on its quality of servicing, relationship building despite the ups and downs in the global economy.
