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Deutsche Bank set for India deal
Francesco Guerrera from Hong Kong and Khozem Merchant from Mumbai, FT Syndication Service
10/24/2005
Deutsche Bank is to announce its entry into India's fast-growing retail banking market in a move that underlines its desire to expand in Asia.
The Indian expansion follows the recent announcement that a consortium led by Deutsche Bank will pay euro 272m ($328m) for a 14 per cent stake in Huaxia Bank, a mid-sized Chinese lender.
The two moves are Deutsche's first forays in retail banking markets outside Europe and are part of its strategy to offer a full suite of financial services products to the emerging middle classes of rapidly expanding Asian economies.
Deutsche declined to comment on its Indian plans but people close to the situation said the bank would launch retail services at eight new branches, five of which would be based in existing offices.
The branch expansion will enable the German bank to compete with foreign rivals with a mature presence in India, including Standard Chartered, HSBC and Citigroup.
Chuck Prince, Citigroup chief executive, said recently in Mumbai that the US bank was on a path of "organic growth" in India, where recently introduced rules do not permit foreign control of domestic banks until 2009.
Rainer Neske, Deutsche board member and head of global retail banking, is to unveil the ambitious Indian retail strategy today, adding to the bank's 25-year presence in wholesale banking services in India.
The five offices in India's top five cities are geared wholly towards corporate banking services, including advisory work and transaction services.
India's banking regulator has awarded Deutsche three new bank branch licences, allowing the bank to open outlets that will tap into a booming market for consumer loans and other retail services -- typified by the exceptionally strong second quarter performance announced recently by India's HDFC Bank, the country's second-largest private sector bank and a leader in consumer products.
Deutsche also runs an asset management affiliate in India with about Rs20bn ($446m) of assets and a private wealth arm.
Deutsche is believed to have beaten competition from France's Société Générale and Singapore's DBS in the race to buy a stake in Huaxia, which was advised by UBS.
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