The growth of millionaires in India has enticed Standard Chartered Bank, one of the oldest foreign banks here, to launch private banking services in the country. Some 100,000 Indians now have an investible surplus of more than $1 million (Rs4.1 crore).
To begin with, the bank will offer investment advice across asset classes such as equity-oriented products, fixed income and real estate venture funds. This will be an extension of its wealth management services, in which it has a customer base of one million.
The India launch is a part of the bank’s global foray into the private banking space as it is entering eight other markets. These are Singapore, Hong Kong, Beijing, Seoul, Shanghai, Dubai, London and Jersey. In India, it is rolling out its services in Mumbai and Delhi. It hopes to be present in six top cities of India by 2008-end.
The private banking market in India is already crowded with players such as Citigroup, DSP Merrill Lynch Ltd, BNP Paribas and Deutsche Bank in the fray.
Among domestic players, Kotak Mahindra Bank Ltd,ICICI Bank Ltd and HDFC Bank Ltd, among others, offer wealth management services to high net-worth individuals.
According to the 2006 Asia Pacific Wealth report by Cap Gemini and Merrill Lynch, with a 20% growth in number of high net-worth investors, India is among the top 10 countries in terms of growth in that segment.
Standard Chartered acknowledges that the market is crowded. “But it’s a fragmented industry with none of the players having a dominant market share,” says Shiv Khazanchi, MD and head for the private banking operation.
“We realized that the services we provide to our customers and the services they want from us need to be expanded now. We have clients in India and in other countries with whom we have been dealing for many years,” says Peter Flavel, global head of private banking.
The private bank will primarily tap the owners and promoters of its 10,000 clients in the small and medium enterprise segment. In Mumbai, it has already enrolled 200 such high net-worth clients. Besides this, the wealth management customers of the bank will also migrate to private banking, provided they meet the networth requirement.