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State Bank of India will shortly be launching UK mortgages targeted at the UK Indian community, as it seeks to entice a broader swath of non-resident Indians to the bank.
The mortgages, which will be targeted largely at the Indian community, are likely to be the first of a wider range of products, including savings products that will be launched as the bank's UK arm gradually expands its services for the Indian diaspora. The expansion will be spearheaded by Mr Deepak Ahuja, the former head of NRI Banking for Europe at Barclays in London, who joined SBI as its head of Consumer Banking and Wealth earlier this month.
“We want to be the bank of first choice for the Indian community offering home and host banking,” he told Business Line . For the moment the focus will be residential mortgages, though the bank is looking at other products such as Investment Savings Accounts.
“Till now Indians who wanted these products would go to the high street banks, but we want them to come to us. We want to create investment products specially tailored to Indian needs.” The consumer banking department is likely to at least double its workforce from the current level of 50 employees over time.
Last year, the bank launched a five-year stepped bond in the UK, which paid an average of 4.5 per cent, which proved popular. Similar products would be considered in the future, said Mr Ahuja.
Wealth management
The bank is also considering moving into wealth management, Mr Ahuja said, stressing that the products offered would be “simple.” “Typically when one thinks of wealth management one thinks of complex products, but we want simplicity, and products that are easy for the customer to understand,” he said.
The bank is keen to stress that it is not preparing to rival UK high street banks and the mainstream market. “Going aggressively into the mortgage market is not our intention,” said Mr Rajnish Kumar, Regional Head (UK) of the State Bank of India. Operations would focus in and around areas with high Indian populations. “We want to be a community bank,” he said.
Additional branches
The bank plans to roll out an additional three branches over the summer, taking its total number to 10. This will include branches in the London borough of East Ham, and the cities of Wolverhampton and Coventry — all areas with high Indian populations.
While the first wave of migrants to the UK currently makes up the bulk of the bank's clients here, Mr Kumar said he hoped, in the long term, to broaden its appeal. “Our challenge will be to get professionals and high net worth individuals on board.”
Europe has seen a number of foreign banks stepping up their operations to cater to their home communities, amid mistrust of European banks in the wake of the financial crisis. Earlier this week, China's ICBC announced it would be opening divisions in Milan, Madrid, Paris, Brussels and Amsterdam focused on Chinese workers.
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