DBS expects India retail banking to break-even by 2016

Singapore’s DBS Bank expects its consumer banking business in India to achieve break-even by calendar year 2016.

A growing liability base and cost control has made the foreign lender confident of turning its retail banking business in India profitable in the next couple of years. “We will be able to hit a monthly break-even by next year. But full break-even will happen only by calendar year 2016. Last year, our (retail banking) revenues grew by 42 per cent, while expenses increased 21 per cent. It shows we are headed in the right direction,” Rahul Johri, executive director and head of the consumer banking group at DBS, told Business Standard.

DBS entered India in 1994 and set up its first branch a year later. It became active in the retail banking space only in 2008-09. It currently has 12 branches and 35 ATMs in the country. It is keen to set up a subsidiary in India and is re-working on its branch expansion strategy. In retail banking, the lender is now entering the mortgage business and plans to introduce home loans and loans against property in Mumbai and Delhi in a couple of months.

It is also betting on the digital space to grow its customer base. “Branch licensing is expensive and it takes time. So, the focus on digital can be very useful. We already have internet banking and mobile presence. Now, the plan is to see how we can use the emergence of smartphones to ensure a complete banking experience can be provided via phone, so that customers do not need to visit branches,” said Johri.

The bank is also targeting the emerging affluent population — customers who typically have a relationship balance of Rs 3-20 lakh with the bank.

So far, the focus has been to service the affluent section of society. Johri said DBS would come up with certain tailor-made offers for the affluent population in the next three to six months.