FirstRand Bank eyes break-even by '14-end

The bank hopes to close the balance sheet next fiscal at $270 million

FirstRand Bank India, the domestic franchise of South Africa’s second largest financial services group, is hopeful of reaching the break-even point in its commercial banking services in India in 2013-14.

“We are hopeful that our commercial (corporate) banking arm will break even by the end of the next fiscal. The balance sheet of our India franchise stood at $200 million as of 2012, with an asset base of $52 million,” its chief executive for retail & commercial banking, Bouphendra Madhav, told PTI.

The bank hopes to close the balance sheet at $270 million in FY14 , he added. FirstRand Bank India, which had opened its branch in the country in 2009, is the only South African bank in India and currently offers commercial and retail banking, apart from services in the area of fixed income, currency and commodity trading, international and investment banking.

The bank also runs a no-frills account division at its retail banking branch here. It has so far opened 11,000 tiny accounts since it began operations last April in the megapolis as part of its own financial inclusion drive, he said.

The bank could secure only one branch licence so far and opened its first retail branch last April in the city. Its retail banking has just about 200 high networth clients and its deposit base is only around $15 million, he said.

Madhav also said the bank is not keen on entering the credit market at its retail banking division anytime soon.

“Probably, we will start secured personal loan services by next fiscal, which begins in June. But we have no plans to launch credit cards of unsecured lending soon.” On capital infusion by the parent company, Madhav said they were  well capitalised and there would not be any dearth of funds. The franchise has around 100 employees now, mostly at the non-retail baking divisions.

“Our parent has already invested $75 million into this franchise and is willing to pump more when needed. But there is no physical expansion plan as of now due to the lack of regulatory clarity,” he said.

On seeking more branch licences, Madhav said, “We will not be seeking more branch licences in the immediate future as the regulatory environment here lacks clarity.”