Standard Chartered is banking on rising affluence in India, strong income growth in the wealth segment and its global network in its pivot toward wealth management in the country.
The bank plans to add over a hundred relationship managers, increase entry thresholds in its wealth management business and leverage its corporate banking associations as it doubles down on its wealth management business in India.
Samir Subberwal, global head, wealth solutions, deposits and mortgages at the bank said shifting focus to the affluent in retail banking will help Standard Chartered to play from a position of strength in India which is a difficult market to compete in the mass market space where local banks dominate.
“India is among the top five markets for the group if we take wealth income as a parameter. India has had the highest growth rate for the last five years, though the size of the business is still smaller than some of our big centres, like Hong Kong, Singapore, Taiwan and China,” Subberwal said.
The bank declined to share income or assets under management (AUM) numbers from India though it said income from wealth and retail banking in India has grown 17% while home loans have grown 15% between 2020 and 2023.
The bank categories wealthy clients in India starting with emerging affluent at Rs 15 lakhs, priority banking above Rs 30 lakhs and the most wealthy private banking clients at $1 million plus. Subberwal said the bank plans to increase the entry threshold and add another ultra high net worth tier within the private bank to reflect the increase in affluence in India in the last 10 years.
In the first six months of 2024, Standard Chartered’s global wealth business posted a record income of over $1.2 billion, up 23% year-on-year, driven by a 25% increase in income from investment products. AUM grew 12% from December 2023 to $135 billion, including $23 billion of new money during the first half of the year.
CEO Bill Winters has said that the bank will double investments in the wealth management business and reshape its mass retail business to focus on developing the pipeline of future affluent and international banking clients.
Subberwal said the wealth’s business capital light model also is a positive for the bank to achieve its return on equity targets. Last month the bank increased its return on tangible equity (RoTE) target for 2026 from 12% to 13%. Deposits and home loans are also part of the wealth business; the affluent segments also buy investment properties.
“We plan to leverage our corporate banking relationships, use our branches, increase engagements in high value building societies and clubs and also hope to get new clients through the relationship managers we plan to hire to get new customers,” Subberwal said.
The bank does not plan to restart its personal loan business after it sold its Rs 4,100 crore to Kotak Mahindra Bank last month, exiting that business after more than two decades. Subberwal said home loans and credit cards will remain the two lending products within retail for the bank.
“It is unlikely we would ever get back into a personal loan business. The big focus on lending will be loans against shares as well as home loans. Next year, we will launch a new proposition on the credit card side. So that's our strategy. Middle and the high end managers in companies we bank with can naturally be affluent clients with us,” he said.
( Originally published on Nov 12, 2024 )
The bank plans to add over a hundred relationship managers, increase entry thresholds in its wealth management business and leverage its corporate banking associations as it doubles down on its wealth management business in India.
Samir Subberwal, global head, wealth solutions, deposits and mortgages at the bank said shifting focus to the affluent in retail banking will help Standard Chartered to play from a position of strength in India which is a difficult market to compete in the mass market space where local banks dominate.
“India is among the top five markets for the group if we take wealth income as a parameter. India has had the highest growth rate for the last five years, though the size of the business is still smaller than some of our big centres, like Hong Kong, Singapore, Taiwan and China,” Subberwal said.
The bank declined to share income or assets under management (AUM) numbers from India though it said income from wealth and retail banking in India has grown 17% while home loans have grown 15% between 2020 and 2023.
The bank categories wealthy clients in India starting with emerging affluent at Rs 15 lakhs, priority banking above Rs 30 lakhs and the most wealthy private banking clients at $1 million plus. Subberwal said the bank plans to increase the entry threshold and add another ultra high net worth tier within the private bank to reflect the increase in affluence in India in the last 10 years.
In the first six months of 2024, Standard Chartered’s global wealth business posted a record income of over $1.2 billion, up 23% year-on-year, driven by a 25% increase in income from investment products. AUM grew 12% from December 2023 to $135 billion, including $23 billion of new money during the first half of the year.
CEO Bill Winters has said that the bank will double investments in the wealth management business and reshape its mass retail business to focus on developing the pipeline of future affluent and international banking clients.
Subberwal said the wealth’s business capital light model also is a positive for the bank to achieve its return on equity targets. Last month the bank increased its return on tangible equity (RoTE) target for 2026 from 12% to 13%. Deposits and home loans are also part of the wealth business; the affluent segments also buy investment properties.
“We plan to leverage our corporate banking relationships, use our branches, increase engagements in high value building societies and clubs and also hope to get new clients through the relationship managers we plan to hire to get new customers,” Subberwal said.
The bank does not plan to restart its personal loan business after it sold its Rs 4,100 crore to Kotak Mahindra Bank last month, exiting that business after more than two decades. Subberwal said home loans and credit cards will remain the two lending products within retail for the bank.
“It is unlikely we would ever get back into a personal loan business. The big focus on lending will be loans against shares as well as home loans. Next year, we will launch a new proposition on the credit card side. So that's our strategy. Middle and the high end managers in companies we bank with can naturally be affluent clients with us,” he said.
( Originally published on Nov 12, 2024 )
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