ICICI Bank to focus on financial planning

With the sensex attaining new heights everyday, CEO's getting salaries like never before, property prices soaring amidst a real estate boom, asset management and private banking are gaining ground.

Cashing on the trend, ICICI Bank is assuming newer roles, that range from raising IPOs to advising on family matters like inheritance of wealth. For the last two to three years the bank has been consistently growing at 65-70 per cent in the private banking segment.

There are about 1 lakh households in India with wealth more than $1 million. Out of this, ICICI Bank has 1,500 customers in the bracket.

According to Anup Bagchi, head, global private banking, ICICI Limited, customers in the Rs 1-5 crore segment need advice on financial planning, in keeping with their needs, rather than wealth management.

For wealth management, which essentially pertains to people with more than $1 million wealth, the bank has a recruited a specially trained wing of professionals.

The bank had many a times played a role of a advisor for high net worth individuals (HNI) uncertain about the caliber of their successor, he said.

"Most of the inherited wealth is in the form of property. Though most people are asset rich, they are cash poor. In the period of real estate boom, they have the opportunity to liquidate their assets. However, property owners are not choosing traditional methods of utlising the wealth like building houses after houses," said Bagchi, adding "the property owners opt for more returns by tying up with property developers, and leasing the property for commercial projects or selling the residential ones at higher prices."

Bagchi said unlike other banks who are only interested in cash benefits, ICICI helped small and medium entrepreneurs in establishing businesses.

"To grow the business, the SMEs need credit, which we provide. Once the business grows we help them in finding private equity partner, followed by an IPO. Thus we carry the whole cycle for the company," he said.

According to the latest Asia Pacific wealth report by Merrill Lynch and Capgemini, South Korea and India are the two fastest growing markets in Asia Pacific in terms of millionaires, with 21.3 per cent and 19.3 per cent growth respectively.

The report further said that India, Japan and Indonesia defied the trend of slowdown of the economy, with GDP expanding at a consistent rate over 2004.

Bagchi further said with Asian markets booming, investors prefer wealth exposure to the Asian markets rather than to the European and Asian markets.