Foreign banks eye retail broking space

Global majors seek local tie-ups.

The retail broking space is set to get livelier in the coming weeks, with three international banking majors Deutsche Bank, Standard Chartered Bank and UBS planning to enter the high-potential sector.

Citigroup, which had already announced its intention to enter the retail broking business, was likely to firm up its plans soon through a strategic partnership with a local brokerage house, sources said.

"India is an under-serviced market and there is a great potential in the retail broking business. With an increase in GDP, income levels and higher disposable money in the hands of the middle class, there is a huge market to tap. We are planning to enter the retail broking space," said a top official of Deutsche Bank.

"We have big plans for private banking and retail broking is also high on our agenda," an official at Standard Chartered Bank said.

UBS, which gained a foothold in the domestic mutual funds business by acquiring StanChart's local mutual funds business for Rs 540 crore last week, was already into institutional broking as a foreign institutional investor.

The Zurich-based banking major, which was on a hiring spree for its investment banking business in the country, would be considering retail broking in a serious way, said an industry source.

"Retail broking is part of banking services and everyone wants to offer a whole gamut of services to clients, as the cost of selling to existing clients is less," said an official at a leading brokerage house.

"For any private bank, it is presupposed to have a good customer database and at least a good number of branches. These foreign banks have been around in India for a long time. They have a good customer base," added Ashvin Parekh, partner and national leader, global financial services, Ernst & Young, India.

Deutsche Bank also has fast growing asset management and private wealth management businesses in the country, with over ¤1.5 billion of assets under management.

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India calling

Banking majors Deutsche Bank, Standard Chartered Bank and UBS plan to enter the sector

Citigroup is likely to firm up its plans soon through a strategic partnership with a local brokerage house