ING Vysya Bank set to treble retail portfolio

ING Vysya Bank is looking to treble its retail portfolio over two years, after having failed to capitalise on the phenomenal growth in the Indian banking sector over the last few years. Dutch financial services group ING owns over 44 per cent stake in ING Vysya.

"We plan to nearly triple our retail assets base from around Rs 5,000 crore to Rs 14,800 crore by December 2008. Retail deposits will have to grow from Rs 11,000 crore to around Rs 28,000 crore over the period," said Shantanu Ghosh, country head, retail banking, ING Vysya Bank.

Retail assets account for half of the net advances of the bank, which stood at Rs 10,232 crore at the end of March 2006. Retail deposits constitute 85 per cent of the total deposits of Rs 13,335 crore.

However, net advances saw a year-on-year growth of only 12.67 per cent in 2005-06 against the industry average growth of 31 per cent. Some private banks even registered a growth of 40-60 per cent. Similarly, its total deposits grew by 6.09 per cent against industry growth of around 16 per cent.

The bank is planning to increase the share of fee-based income. "At present, interest income contributes around 70-75 per cent of total income. We are looking at a 50 per cent ratio between non-interest income and interest income," said Ghosh.

"The bank will grow its existing businesses with focus on retail and SME segment, corporate financing and financial markets and private banking capabilities," said Vaughn Richtor , CEO, ING Vysya Bank.

The bank is targeting a 3-year growth plan for its private banking operations. "Private banking will contribute around 10-15 per cent to the bank's revenues over the next 2-3 years, " said Samir Bimal, country head-private banking, at ING Vysya. The private banking business unit has around Rs 1,500 crore under advice.

"We will add 2 more branches to the 4 branches currently offering private banking services early next year. We will also look at offering new products in both financial and non-financial advisory services," said Bimal.