Singapore: French bank Societe Generale plans to aggressively expand its private bank in India, doubling its staff and boosting its network to serve the rich in Asia’s third-largest economy.
Balakrishnan Kunnambath, head of SG Private Banking’s Indian unit, which oversees domestic and offshore clients, told Reuters on Tuesday that the bank plans to double the number of relationship managers in three years, from 80.
It also intended to expand into eight to 10 Indian cities from existing offices in Mumbai and New Delhi and set up trust services to advise clients on their inheritances.
The plan comes as SocGen’s private bank tries to grab opportunities from India’s growing wealth that will see accelerated growth from liberalisation of its financial markets.
“The market awareness is increasing, the wealth is increasing, number of millionaires is increasing and deregulation is happening at a much faster pace,” Kunnambath said in an interview.
With 100,000 millionaires in 2006, India’s millionaires grew at a 21% rate that year, according to a Merrill Lynch-Capgemini report.
That has encouraged international banks to expand into India.
Morgan Stanley said in October it is unleashing a major drive to tap India’s domestic wealth this year, hiring 100 private bankers in a bid to manage $1 billion in assets by 2010, as it competes against Merrill Lynch and Citigroup.
Societe Generale last week announced it has appointed Nipun Mehta as head of SG Private Banking in India. Mehta will report to Kunnambath who heads the global unit which has offices in Hong Kong, Singapore, Geneva, London and Dubai.
The recent alliance with Rockefeller Financial Services gives SG Private Banking the opportunity to tap the non-resident Indian market in the United States, he said.
SocGen is trying to battle back from a €4.9 billion ($7.6 billion) loss disclosed in January which the bank said was caused by a rogue deals carried out by Jerome Kerviel, a 31-year old trader.
Kunnambath said assets under management of the French bank’s Indian private banking unit rose at a yearly pace of 40-45 percent in the last three years and could continue to grow at the same pace because of the huge growth potential for India’s domestic market.
“At least for three or five years growth will be at this or higher level,” he said. “Onshore is growing faster than offshore.”
He did not disclose the size of assets, but added that the private bank in Asia manages $20 billion, with India among the top five markets for SG Private bank.
Kunnambath, who joined SocGen from ABN AMRO in 2005, said assets of non-resident Indians account for 65% of the total, but added that will change once India opens up its financial markets.
“So the scenario is that three years down the road when you have full capital account convertibility you will be able to do more or less the same what you are doing in Singapore or Hong Kong by sitting in India.”