Deutsche Bank India has emerged among the top players in the debt syndication and equity capital markets. Capitalising on the India growth story the bank wants to maintain a compounded annual growth rate of 25%. Gunit Chadha, managing director and chief executive for Deutsche Bank India speaks to FE?s Anita Bhoir on the bank?s growth plans and the economy.
How do you assess the foreign risk appetite for both Indian debt and equity?
From a global debt capital point of view, there is a huge appetite for Indian paper. Last year, while Indian banks seized the opportunity, very few corporates followed suit in raising funds abroad. India is not a big supplier of dollar paper. Corporate paper is even more attractive as the supply is scarce.
The pipeline is strong and we will see high yielding corporate paper in the five-ten year tranche over 2011.
I believe that, as was demonstrated in the Coal India IPO, if there is an IPO from a quality company with enough liquidity and free float, there will be takers. So, whether it is Coal India or another IPO from one of the divestment candidates or any private sector candidates, there will surely be a good appetite from investors abroad.
Do you anticipate any fall out of the Japanese crisis?
Its amazing that when you started in January 2011 and you asked global investors what they thought would be the biggest risks, eurozone crises would have topped the list.
From a local standpoint, inflation would have been a risk for India. But in the last two months the biggest headlines have been taken over by Tunisia, Egypt, Libya and Japan. Volatility is difficult to predict as to where it will emerge from and the scars it can leave.
What would be the growth numbers for the bank?
Deutsche Bank has grown at a compounded rate of 25% per annum for the past five years. If India continues to grow at 8-9%, we would continue to see a compounded growth of 25%.
We are focused on sustaining leadership in our equity capital markets and equity broking businesses. That?s an area we will continue to invest in. Many of our clients are now looking for cheaper source of debt capital for longer tenures. We will continue to be a bridge for Indian companies seeking global pools of capital.
Our transaction banking business is a key contributor to our franchise and we will continue to invest in it. I would be happy to get more branches from RBI, as it will help us grow our retail business as well.
Are you satisfied with the consumer banking business in the country?
We have 15 branches and we will continue to invest in branch network if we get the requisite approval from the Reserve Bank of India. Our products are largely driven around deposits, investment and mortgage products. Unsecured lending is largely restricted to the customers of the banks and not through the DSA (agency) channel. Our aim is to make that business increasingly profitable.
What?s the status on the sale of your credit card portfolio?
The card business needs to be scaled up to be a top three player and run profitably. We are rethinking our strategy in this sector.