Singapore's DBS Increases Focus On India's HNW, Corporate Market

Tom Burroughes

1 April 2010

Singapore-based DBS Bank has announced it has agreed with the Muragappa Group for the latter to buy out its 37.5 per cent stake in Cholamandalam DBS Finance, as DBS focuses on sectors such as wealth management and corporates.

DBS stated that it “remains committed to India, a high-growth market, where it has enjoyed stellar performance over the past five years”.

The deal was “in line with its recently unveiled strategy to pursue growth in India by focusing on corporates, high net worth individuals and emerging affluent customers”, DBS said. DBS India and Murugappa remain open to future collaboration opportunities, which may include wealth management and the distribution of financial products.

A number of banks are looking to step up their involvement in India's wealth management and mass-affluent market, attracted by the rapid growth of the country's economy in recent years. Earlier this week, the chief executive of Religare Macquarie Private Wealth was quoted saying that the firm was scrambling to keep up with the pace of growth in the economy. Credit Suisse, meanwhile, has won in-principle regulatory clearance to set up a bank branch in India, joining a trend of Western banks in seeking to tap the country's financial services market.

The purchase by Murugappa Group, DBS’ joint venture partner, was made at S$2.84 (around $2.02) per share. The transaction is expected to be completed on or before 12 April 2010 and is not expected to have any material impact on the financial performance of DBS.

“DBS is executing swiftly on the new strategic roadmap unveiled by CEO Piyush Gupta in February – in India, the bank wants to focus on corporate clients as well as the HNI and emerging affluent segments,” DBS said.

“DBS and Murugappa Group remain open to future collaboration opportunities in areas such as wealth management and the distribution of financial products,” it said.

DBS Chief Executive Piyush Gupta said: “We are at the beginning of what has been heralded as Asia’s decade. With a growing network in India, as well as other major emerging markets in Asia, DBS is well-positioned to ride the region’s growth. DBS is the first and largest Singapore bank in India, and has enjoyed tremendous growth over the past five years. With the rising middle class and with growing intra-Asia trade flows, we are excited about the opportunities ahead.”