Mumbai: National Australia Bank Ltd (NAB) is the second Australian bank to set up shop in India eight months after its larger rival Australia and New Zealand Banking Group Ltd (ANZ) returned to the country. ANZ left India a decade ago. In an exclusive interview, group chief executive officer (CEO) Cameron Clyne and Asia CEO Rob Wright of the 154-year old Australian bank discuss why it chose to come to India and its business plans. Edited excerpts:

Why are you in India?

Clyne: The relationship between Australia and India is continuing to

Expanding footprints: NAB’s chief executive officer (CEO) Cameron Clyne (right) with the group’s Asia CEO Rob Wright. Abhijit Bhatlekar/Mint

So we thought it was time that we established our presence here and help our customers. Initially, the focus will be on most active parts of trade in the resources and energy sector.

You are the largest Australian bank in business banking.

Clyne: Business banking includes everything from small and medium enterprises to corporate banking and we have got a lot of insight on what companies want. One of the things is business between Australia and India. Two larger Australian banks are focusing on the retail sector. The fact that we are the fourth largest bank in terms of market cap doesn’t negate our rank in business banking. We have increased our market share in business banking in the last four years—about 25% now and the largest.

Isn’t it a little late to enter India?

Clyne: The statistics suggest now is a good time. If trade relations continue on the same path then it is a good factor. We are very much of the view like many others that we are emerging into a period of Asia dominating growth.

Yes, Europe is going through some difficulties and that will have an impact because Europe is an export destination for Asia, but we are going through a transition from Europe to Asia so we are not dissuaded by what’s happening in Europe now.

Are we too late? We don’t believe so. Perhaps there are advantages in being here earlier. But this is a multi-decade transformation and we are not going to lose a lot of sleep whether we are here a little late because those trade figures are only going to grow.

What took you so long to come here?

Clyne: The important thing to have in any expansion overseas is a strongest possible domestic franchise. Our first priority was to ensure we were developing our Australian franchise. It wasn’t the right time to expand offshore. We have strengthened our Australian franchise now and we have the ability to start overseas operations.

Recently, we have opened (branches) in Shanghai and Jakarta as well to go with operations in Tokyo, Osaka, Hong Kong and Singapore. We just feel it’s the right time to put the markers down.

Can you give us an idea of the Asian business?

Wright: It’s the same story in every location. We are here to support Australians and New Zealanders who want to do business in Asia and locals who want to do business in Australia and New Zealand. We work on growing trade and investment between countries and it’s working for us. Our customers are responding well. We are where we want to be for a couple of years right now.

India rounds that up quite nicely. I think we would see some organic growth within each of our branches driven by customers.

Is this Asian outlook only a couple of years old?

Clyne: It’s a natural evolution. At the end of the day, we want to maintain our position as Australia’s leading business bank, which we have done. It’s a natural evolution of that to want to follow your customers to where they want to do business. It’s not a change but a logical evolution of strategy.

India needs energy and Australia has that in plenty.

Clyne: One thing Australia has is energy in a number of forms; we have a range of relationships with those companies and we will be hoping to help them. It’s not just commodities but also technology and electrical property and how we can bring that in. There is a very neat opportunity here—Australia is rich in resources and an emerging country like India needs that resource.

The Indian banking regulator is frugal in giving branches to foreign banks. Will you able to survive with only one branch?

Clyne: We are making a long-term commitment. We see tremendous opportunity but we have to play by the rules.

We are taking a long-term view; we hope that we can develop that initial presence, and if opportunities emerge in the future, so be it. We would rather participate on the basis of which we have been invited. The best way is to be here, learn the market, develop relationships and, over time, expand.

Any projections you have got on the trade between India and Australia?

Clyne: It has been growing 25% before some of the opportunities like uranium opened. So, I would say that its going to grow at a similar if not a faster rate.

Australian banks are also going through a challenging period with likely lay-offs. In this scenario, how will you support India operations?

Clyne: We have 44,000 employees and are always adjusting our workforce to reflect needs. None of this will have an impact on our support or employment prospects in our Mumbai branch. The reality is consumers and businesses around the world are cautious at the moment and that low demand has an impact on staffing numbers.

We are a bank that’s been in Australia for 154 years; we have seen cycles and will never make a hasty decision that jeopardizes our ability to service our business customers.

How long will this global uncertainty continue and what will be its impact on banks in Asia-Pacific?

Clyne: The major impact will be if there is concern on disorderly default, which will freeze up markets. The pleasing thing about the recent developments in Europe is that it moves into a orderly fashion, which means credit markets function, money is available, over time spreads will come in and it’s helpful. If people start to hear less of Greek tragedies, then you start getting confidence back and getting people to invest and help economy move.