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Re: midastouch017 post# 70097

Sunday, 10/09/2005 3:46:49 PM

Sunday, October 09, 2005 3:46:49 PM

Post# of 593309
Consider this: India is now bankersג€™ favourite a/c

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India continues to be the flavour of the year on the banking circuit. Chuck Prince, Citigroup global CEO, will come calling sometime this month, and in November, it will be the turn of the HSBC bigwigs.

The global board of the UK bank will meet for the first time in India during the third week of November. The board is expected to meet in Delhi.

A host of appointments have been lined up with top government and finance ministry officials. Members of the board will also visit Mumbai and some other cities. A meeting with Reserve Bank of India officials, besides HSBC’s key clients and employees, is also on the cards.

Members on the HSBC board include Sir Mark Moody-Stuart, former chairman of the committee of managing directors of the Royal Dutch/Shell Group of Companies and RA Fairhead, finance director of Pearson.

HSBC has, till date, invested over $800 mn in its Indian banking operations. In March ‘05, the bank injected $150m. Along with retained earnings of the bank for FY04 and FY05, the total capital infusion into the Indian operations is $243 mn. The capital adequacy ratio of the bank was 14.03% as on March 31, ‘05.

Other than the branch operations, the group also has a data processing centre, software development centre, asset management business and a liaison office for its private equity business, apart from HSBC Securities and Capital Markets, (India) which offers broking and investment banking business in the country.

The group is also in the process of setting up a 100% non-banking finance company to target the consumer finance business in the country, for which it has already obtained FIPB approval.

However, compared to China, where the group has invested close to $4 bn by acquiring stakes in banks, the group’s investments in India have been fewer due to regulatory restrictions.

HSBC currently has a 12.19% stake in UTI Bank.

HSBC has been in talks with RBI to reduce its stake to 5% as mandated by the regulator. The bank’s stake had come down after the GDR offering by UTI Bank. HSBC’s stake will fall further if UTI goes for another capital offering

There have been many high-profile visits of senior global banking officials. Citigroup CEO, Chuck Prince, will be on his first visit to India this week. Standard Chartered Bank’s group CEO, Mervyn Davies and Barclay Group CEO, John Varley have also visited India in the recent past.

According to a senior foreign banker, “India is now the flavour. Even though the RBI has effectively blocked any acquisitions by foreign banks, these visits by global chiefs and boards are just to keep in touch with policy makers and other key constituents. Everyone wants to be seen as aggressive on India, and they all want a part of the action when things start moving. The visits are also a way of getting first-hand information on the economic boom in the country.”,curpg-1.cms