Prashant Joshi heads Deutsche Bank's retail banking business in India. In an interview with Somasroy Chakraborty, he discusses the recent trends in retail banking business in the country. Edited excerpts:
Do you expect the retail loan demand to remain strong in the second half of this financial year?
Detail loan demand has been strong, particularly in the home loan and business loan segments. Stable property prices in most locations and expectation of further reduction in interest rates has contributed to growth in home loan business. Small and medium size businesses that are led by consumption demand are borrowing for growth while industrial demand and large corporate dependent businesses are borrowing to meet elongated working capital cycles. Normally, economic activity picks up in later part of the year with festive season and increase in post-harvest rural demand. As such, we do expect the retail loan demand to remain strong in the second half of the year.
What is your outlook on lending rates?
In its recent review of monetary policy, the Reserve Bank of India (RBI) has indicated likely softening of interest rates in the beginning of the next year. Deutsche Bank has recently (on October 18, 2012) reduced its base rate by 25 basis points.
What are your growth plans? Do you plan to enter any new businesses in the retail lending space?
Deutsche Bank's retail business will grow across all business lines – deposits, third party product distribution, mortgages and business loans. We launched a suite of business lending products recently. At this juncture, we are focused on scaling up our existing businesses significantly over the next two to three years.
You exited the credit card space in 2011. Most banks are once again turning aggressive in credit card business. Will you consider re-entering this business in future?
Successful credit card businesses are built with large number of deposit customers across large distribution networks. With our current distribution network, we are not looking at re-entering the credit cards business.
How do you plan to grow your low-cost deposit base?
For the retail bank, savings and current account deposits continue to grow by 15-20 per cent. As on March 31, 2012 Deutsche Bank's low cost deposits to total deposits was 65 per cent. With strong brand image, superior customer value proposition and top-class internet banking platform, we are confident of continued growth in low cost deposits.
What are your branch expansion plans?
Deutsche Bank now has 17 branches in the country. We will continue to expand our footprint in the country as and when RBI grants us licenses to open new branches.
