Firstpost
  • Home
  • Video Shows
    Vantage Firstpost America Firstpost Africa First Sports
  • World
    US News
  • Explainers
  • News
    India Opinion Cricket Tech Entertainment Sports Health Photostories
  • Asia Cup 2025
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
Trending:
  • Charlie Kirk shot dead
  • Nepal protests
  • Russia-Poland tension
  • Israeli strikes in Qatar
  • Larry Ellison
  • Apple event
  • Sunjay Kapur inheritance row
fp-logo
India retail banking a 'nice oasis' for foreign lenders Deutsche, HSBC, peers; easing regulations, surge in online deals drive change
Whatsapp Facebook Twitter
Whatsapp Facebook Twitter
Apple Incorporated Modi ji Justin Trudeau Trending

Sections

  • Home
  • Live TV
  • Videos
  • Shows
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Health
  • Tech/Auto
  • Entertainment
  • Web Stories
  • Business
  • Impact Shorts

Shows

  • Vantage
  • Firstpost America
  • Firstpost Africa
  • First Sports
  • Fast and Factual
  • Between The Lines
  • Flashback
  • Live TV

Events

  • Raisina Dialogue
  • Independence Day
  • Champions Trophy
  • Delhi Elections 2025
  • Budget 2025
  • US Elections 2024
  • Firstpost Defence Summit
  • Home
  • Business
  • India retail banking a 'nice oasis' for foreign lenders Deutsche, HSBC, peers; easing regulations, surge in online deals drive change

India retail banking a 'nice oasis' for foreign lenders Deutsche, HSBC, peers; easing regulations, surge in online deals drive change

Reuters • March 3, 2020, 15:16:53 IST
Whatsapp Facebook Twitter

Improved performance in India and its basis in the take-up of digital retail banking services could also offer hope for other large markets with potential far greater than the profit so far delivered, such as China.

Advertisement
Subscribe Join Us
Add as a preferred source on Google
Prefer
Firstpost
On
Google
India retail banking a 'nice oasis' for foreign lenders Deutsche, HSBC, peers; easing regulations, surge in online deals drive change

Mumbai/Hong Kong: Outsized returns in India, besting local lenders for the first time in a decade, are emboldening banks such as Citigroup, Deutsche Bank and HSBC to invest more in a market that has long held promise but tended to under-deliver. Easing regulations and a surge in online banking are driving the change, with several overseas lenders increasing investment plans for the country to win affluent clients away from domestic rivals, senior bankers told Reuters. Improved performance in India and its basis in the take-up of digital retail banking services could also offer hope for other large markets with potential far greater than the profit so far delivered, such as China. [caption id=“attachment_805249” align=“alignleft” width=“380”]Reuters Representational image. Reuters[/caption] “With transaction banking going very strong and retail banking picking up pace, a lot of foreign banks globally are now focusing on India and registering better performance,” said Sanjoy Datta, Deloitte India financial services practice head. “It may pose some challenges as banks plan to expand more into the tier-two towns but overall, foreign banks in India will continue to grow as there are no imminent (industry-specific) challenges,” he said, pointing to technology as a key enabler. Lured by a massive economy and rising middle-class income, more than three dozen foreign lenders in India have been vying for a bigger share of the market for decades - yet they account for just 6 percent of the banking assets. Aiding the latest growth spurt is regulatory easing in support of technological financial services. For instance, the central bank in August allowed banks - under a “regulatory sandbox” framework - to launch products and services such as digital customer background checks and money transfer. Moreover, services such as digital payment have been growing rapidly led by a government push to bring more cash-loving merchants and consumers into the formal economy. Taking advantages of such developments, foreign banks’ annualised return on equity (ROE) in India rose to 9.9 percent in the six months to September-end, from 6.9 percent a year earlier, central bank data showed. That beat the 6.1 percent of domestic private lenders for a second consecutive half-yearly period - for the first time since the global financial crisis. At the same time, local private and state-backed banks are increasingly constrained by souring loans, low levels of capital and governance issues at the biggest players - all in a slowing economy. “In the next five years foreign banks along with private lenders will have an opportunity to grow as state-owned banks are losing market share due to capital constraints and shift in focus to consolidation,” said Ashvin Parekh, an independent financial services consultant. Rapid adoption of technology The rapid adoption of technology — for processing payments, acquiring customers and selling products — is the real driver of foreign lenders’ success, bankers and analysts said. “It’s become a little bit more of a level playing field and it’s up to your digital strategies and your digital capabilities,” said Ramakrishnan S, HSBC’s India retail banking and wealth management head. “Frankly speaking, there’s no reason why we shouldn’t grow as much as anybody else.” HSBC’s pre-tax profit from its India retail and wealth management unit more than doubled to a record $48 million last year. While small compared with the $6.6 billion it made in its home market of Hong Kong, the figure contrasted sharply with HSBC’s $74 million loss in China. The Asia-focused lender, which intends to double spending on technology and marketing in the coming three years, aims to double profit again over the next three to five years, Ramakrishnan said. All this even after it cut its number of bricks-and-mortar branches to focus on its digital presence - and in the face of a new regulation giving foreign lenders greater freedom to expand branch networks if they convert them into local subsidiaries. Previously, the central bank limited the number of branches foreign lenders could open, which Western bankers said was a major source of frustration. US rival Citi launched a wealth management app in January 2019 which allows clients to open investment accounts instantly and without having to visit a branch. Last year, it saw double-digit growth in affluent clients, its target market. “Sometimes having limited brick-and-mortar presence can actually become an advantage because you start thinking about other ways for customer acquisition, engagement and service and you are not distracted by branch profitability,” said Shinjini Kumar, Citi’s India head of consumer businesses. Deutsche Bank enjoying boom in India Even Deutsche Bank, which laid off 18,000 staff globally in July as part of broader restructuring, is enjoying a boom in India, home to its only retail business outside Europe. Two years ago the bank considered selling the unit but now sees it as a “nice oasis”, said Kaushik Shaparia, head of the German lender’s India operations. Deutsche injected nearly 500 million euros ($552.45 million) into those operations in early 2019, its single largest investment in the country. The bank aims to double India revenue from 560 million euros in 2018, Shaparia said, declining to give a time frame. “Even when the bank is really looking to grow in a very, very efficient manner, we get investment also in terms of headcount and systems. We punch way above our weight compared to what the firm broadly does.”

Tags
Economy banking NewsTracker HSBC MIddle Class financial services Retail banking online banking digital payment regulatory easing
End of Article
Latest News
Find us on YouTube
Subscribe
End of Article

Impact Shorts

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Chennai Ranks #1 in Challan Checks: ACKO Insights for Smarter Car and Two Wheeler Insurance Decisions

Chennai leads India in challan checks, with drivers checking their e-challans over 5 times a month on average. Helmet non-compliance is the most broken rule, accounting for 34.8% of all traffic offences in Chennai. Regular digital challan checks help drivers avoid hefty fines, promote safe driving, and improve insurance premiums.

More Impact Shorts

Top Stories

Charlie Kirk, shot dead in Utah, once said gun deaths are 'worth it' to save Second Amendment

Charlie Kirk, shot dead in Utah, once said gun deaths are 'worth it' to save Second Amendment

From governance to tourism, how Gen-Z protests have damaged Nepal

From governance to tourism, how Gen-Z protests have damaged Nepal

Did Russia deliberately send drones into Poland’s airspace?

Did Russia deliberately send drones into Poland’s airspace?

Netanyahu ‘killed any hope’ for Israeli hostages: Qatar PM after Doha strike

Netanyahu ‘killed any hope’ for Israeli hostages: Qatar PM after Doha strike

Charlie Kirk, shot dead in Utah, once said gun deaths are 'worth it' to save Second Amendment

Charlie Kirk, shot dead in Utah, once said gun deaths are 'worth it' to save Second Amendment

From governance to tourism, how Gen-Z protests have damaged Nepal

From governance to tourism, how Gen-Z protests have damaged Nepal

Did Russia deliberately send drones into Poland’s airspace?

Did Russia deliberately send drones into Poland’s airspace?

Netanyahu ‘killed any hope’ for Israeli hostages: Qatar PM after Doha strike

Netanyahu ‘killed any hope’ for Israeli hostages: Qatar PM after Doha strike

Top Shows

Vantage Firstpost America Firstpost Africa First Sports
Latest News About Firstpost
Most Searched Categories
  • Web Stories
  • World
  • India
  • Explainers
  • Opinion
  • Sports
  • Cricket
  • Tech/Auto
  • Entertainment
  • IPL 2025
NETWORK18 SITES
  • News18
  • Money Control
  • CNBC TV18
  • Forbes India
  • Advertise with us
  • Sitemap
Firstpost Logo

is on YouTube

Subscribe Now

Copyright @ 2024. Firstpost - All Rights Reserved

About Us Contact Us Privacy Policy Cookie Policy Terms Of Use
Home Video Shorts Live TV