Deutsche Bank on Tuesday launched retail banking services in India, the first country outside Europe where the German banking major will have a retail presence.
It will set up branches in Mumbai, New Delhi, Chennai, Kolkata, Bangalore, Noida and Gurgaon to tap the growing retail business potential.
Indian banks, particularly the private ones, are riding high on the retail business. ICICI Bank and HDFC Bank have witnessed over 70 per cent year-on-year growth in retail loan assets in the second quarter of 2005-06.
Deutsche Bank has Rs 10,000 crore (Rs 100 billion) of wholesale banking assets in India and infused Rs 419 crore (Rs 4.19 billion) of capital to support its growth in the country.
It's total capital deployed in India is Rs 1,250 crore (Rs 12.5 billion). The bank will look at India's upmarket clientele, with the threshold at Rs 500,000 and Rs 20 lakh (Rs 2 million) for relationship management.
"India is one of the most exciting growth markets today due to the increasing number of its affluent people and we are looking at expanding our presence here, subject to regulatory approvals," said Rainer Neske, member, group executive committee, Deutsche Bank.
The first retail asset product to be launched by the bank would be home loans, its managing director and head of retail banking Ajay Bimbhet said. It is not looking at the credit card segment at the moment.
Deutsche Bank's managing director and CEO, India, Gunit Chadha said, "Having a strong presence in investment banking and custodian services, retail was the only missing bit. With the Indian market witnessing a growth of 30-40 per cent in retail businesses annually, we are open to additional capital infusion into our retail operations here, if required."
The bank has set up a holding company with a capital of $50 million for its non-bank entities in India. The holding company, called Deutche India Holding Private Ltd, will own Deutsche's asset management company, equity broking arm, primary dealership for government securities, its private wealth management firm and a BPO division. Any subsidiary floated by the German bank in future will be under the holding company.
It has recruited 400 people for its retail operations and the core offering will consist of financial planning and advisory services. The bank plans to roll out a comprehensive product and service offering, ranging from current to savings accounts to investment products and loans.
Deutsche Bank has tied up with 14 asset management companies for selling mutual funds and with two vendors for portfolio management services. It has also tied up with Birla Sun Life Insurance and Bajaj Allianz General Insurance.
For ATM facilities, the bank has signed up ATM services provider Euronet for domestic transactions and also with five global players, including Bank of America and BNP Paribas, for international payments.
The group signed a partnership deal yesterday, finalising the purchase of a 14 per cent stake in China's Hua Xia Bank. This agreement is aimed at facilitating co-operation between the two in distribution of credit cards, investment products and cash management services, and assistance pertaining to retail and corporate banking.
