The Hindu Business Line : StanChart Bank firm on entering securities broking

Kolkata April 10 Standard Chartered Bank, which is eyeing a stake in UTI Securities, will go ahead with its proposal to establish a presence in the securities broking space even if its plan does not work out.

The bank, which is said to be in the race for UTI Securities along with several others, hopes to get its hands on the broking firm, which is at the moment controlled by Securities Trading Corporation of India (STCI). Citi, which also has a strong presence in the banking sector, is believed to be one of the players eyeing UTI Securities.

STCI had last year taken over UTI Securities for Rs 265 crore from Specific Undertaking of Unit Trust of India.

Wealth management

"We have decided to be in equity broking and will find a way to get into this business, even if we do not manage to get UTI Securities," said Mr Neeraj Swaroop, CEO-India, SCB. The proposal, he told newspersons, will lead to a fuller realisation of the bank's plans for its wealth management customers.

A wealth management customer, whose first priority may be one or more banking product, may well require a broking service at a later stage, SCB has pointed out. Wealth management, it feels, will be a very critical element of its overall strategy in the coming days.

A number of banking entities, including public sector banks, have established a presence in securities broking in recent times. A few foreign institutions too have shown a definite keenness on this front. A recent example is BNP Paribas, which has bought a critical stake in Geojit.

Eyes portfolio holdings

Standard Chartered Bank has started acquiring small stakes in select private sector banks as part of its investment strategy, Mr Swaroop said. Already, a few investments have been made.

While the bank is not ready to reveal the identities of the outfits that it has bought into, SCB has made it clear that it will continue to pursue the strategy. More will be known on this front in course of time.

SCB has acknowledged that none of its portfolio holdings is as "famous" as HSBC's investment in UTI Bank. HSBC, which has in recent times scaled down its exposure to UTI Bank, now holds about 5 per cent (in December 2006).

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