Singapore-based DBS Bank, that recently converted its Indian branches into a wholly-owned subsidiary — DBS Bank India, on March 4 said it aims to triple the size of its business in the country by increasing exposure to consumer loans.
“We will be focusing on SME and retail over the next five years. Our aim is to get the share of retail business-both liability and assets-to about 30 percent of revenues and profitability,” said Surojit Shome, CEO, DBS Bank India. The lender’s retail loan book is around 10 percent currently.
The bank, he said, aims to triple the size of its balance sheet in the short-run. “We crossed Rs 50,000 crores this year. We think, over three years, we can triple that,” he said.
The bank also plans to increase its headcount in India by 800-1,000 this year.
The bank expects to end this year with net non-performing asset ratio below 0.4 percent with a coverage ratio of more than 90 percent. “Over the last couple of years, unlike others, we were able to put our credit problems behind us. We cleaned up our books, giving us a clean foundation and the opportunity to grow,” said Piyush Gupta, CEO, DBS Bank.
After a wait of over four years, the Reserve Bank of India (RBI) last week, approved the conversion of the existing 12 DBS Bank branches in the country into its registered wholly-owned subsidiary DBS Bank India. DBS Bank was the first foreign lender to apply for the WOS model in 2015. It received an in-principle approval from RBI in September 2017.
With plans to raise its branch count to 50 in the next 12-18 months, DBS Bank India will become the second largest foreign lender in India. Currently, there are 45 foreign banks in India, with Standard Chartered Bank having the largest presence with 100 branches and five subsidiaries. Citibank has 35 and HSBC has 26 branches in India.
State Bank of Mauritius was the first foreign lender to convert to the WOS model, after the regulator’s approval on December 1, 2018. It has four branches in India.
DBS Bank said it continues to remain bullish on India. “We expect a robust growth trajectory over the next two years. We think the prospects are good and we are well prepared,” Gupta said.
The foreign lender has invested Rs 1,800 crore this year to support its conversion and fuel growth in the short run. Its capital base now stands at Rs 7,700 crore in India.
As per the regulatory framework issued by RBI in November 2013, foreign banks that opt for the WOS route will be treated on par with scheduled commercial banks in terms of branch expansion and priority sector lending.
In order to meet these norms, Shome said the bank has obtained RBI’s approval to build its rural lending book over a period of five years.
Ravi Bahl, Vikram Sud, Priti Priya have been roped in to form the bank’s board, which will be chaired by DBS Bank’s Group CFO Chng Sok Hui, pending regulatory approval.