Nitin Chengappa, MD and Head, Affluent, Private Bank and Branch Network, and Pankaj Walia, Head of Private Banking, Standard Chartered Bank, India explain why India is a key private banking market. Edited excerpts:
Standard Chartered Bank India seems gung-ho about India’s private wealth business?
Chengappa: We have a pyramid-like structure starting with regular banking, premium banking, priority banking and, on top of all, the private banking focusses on high networth individuals (HNIs), Ultra HNIs, billionaires and family offices. If you look at global data, the fastest growth of HNIs is happening in India, and that’s why we recently launched exclusive private banking centres in Kolkata and Chennai, taking it to five centres in India. We are also planning to expand in Kerala, Hyderabad and Gujarat in the next one year.
A lot of other foreign banks and Indian banks are also focussing on the private banking space?
Chengappa: Because that’s a sweet spot now. However, foreign banks have two big advantages vis-a-vis a PSU or a private sector bank. First, we have the unique strength of offering an international solution, which nobody can. For example, if a HNI has an account in India as well as in the UAE, he can see both sides of the corridors with our solution.
Second, rich clients look for a lot of diversification opportunities. With the Liberalised Remittance Scheme, there is more receptiveness today to look at global investment opportunities. We see flows happening significantly out of the country for property-related investments or plain vanilla dollar-based investments. These unique characteristics are available only with the global banks.
How do you see the competition from standalone wealth management firms?
Walia: The key differentiator between us and a standalone boutique private bank is that we operate as an universal bank. Very few customers want a standalone wealth solution. Our franchise and ‘One Bank’ approach can support a client on his wealth needs, corporate banking, as well as offer international banking. We are present in about 42 cities with 100-plus branches. Look at Asia. Of the top 4 private banks, two are universal banks, and two are standalone private banks. I strongly feel, in the next five years, universal banks will do much better than standalone boutique private banks, because clients are looking for a trusted advisor, who can also give them comprehensive banking solutions.
What are the asset classes that HNIs are interested in?
Walia: Private credit market is extremely hot and most clients want to look at this space. Most HNIs and family offices have professionals and ex-bankers with, so they are also doing their own due diligence to evaluate the risk-reward proposition in the private credit space. Venture capital is another important area. They want to get into a company at an early stage or in the second or third round, whenever they get an opportunity.
How is the NRI business doing for Standard Chartered?
Chengappa: It is the fastest-growing segment, and we have been growing 35 per cent year-on-year in that business. As a brand, we have a very strong presence in Asia, West Asia and Africa. For an NRI, that’s the first comfort for sending money into a country. Even from a market standpoint, if you really want to make money as an NRI, which market gives you better returns today than India?
Walia: Wherever NRIs stay, they typically have about 60-65 per cent of their assets there. About 12-13 per cent will be invested in onshore India, and the balance in other global markets. That onshore India opportunity is huge. While NRIs are trying to build overseas, an equal or even larger number of NRI families want to invest in the India growth story.
What is the contribution of private banking to overall revenues of the bank?
Chengappa: Private banking contributed 15 per cent of the ‘affluent business’ of Standard Chartered Bank India’s total revenues in 2022. It is expected to grow to 25-30 percent in the next 3-4 years.
How big is the private banking arm of Standard Chartered Bank, India?
Walia: We started private banking operations in 2008. We currently manage close to $12 billion of assets under management of our clients in the onshore India market. We currently have 900 UHNIs and billionaire clients, who are managed by 32 most experienced and most vintage senior bankers. We expect consistent growth in our AUMs over next 3-4 years in the range of 10 per cent annually.