Targets the 1.1-million NRI/PIO market, to begin with home mortgages.
Targeting a market of 1.1 million people of Indian origin and non-resident Indians in the UK, the local branch of India’s largest public sector bank, State Bank of India, is preparing for a big push in mortgages (housing loans) within the retail banking segment.
A full rollout of the products will be completed by March 2011 and the UK branch of SBI will be adding three branches over the existing seven to push its retail agenda. With this, SBI will take on local heavyweights in the mortgage segment such as HSBC, Barclays, NatWest, Lloyds and RBS.
Apart from addressing the local mortgage market among NRIs, the bank also proposes to offer a suite of mutual fund (MF) products from its own stable and from other MFs in India.
SBI UK’s CEO and regional head, Rajnish Kumar, said despite the presence of several large Indian banks in the UK, the penetration among NRIs was less than 10 per cent. The estimated net worth of NRIs and people of Indian origin in the UK is £50-60 billion.
Of SBI’s seven branches in the UK, four are in London and one each in Birmingham, Manchester and Leicester. Three new branches at Newham (London), Wolverhampton and Coventry and an additional 30 people will be added to the existing 150 to enable the retail push.
The bank is also hiring a new head of retail to oversee this operation. SBI tested its ability to address the retail market in the UK with savings and fixed deposit accounts and got some 6,000 customers over the past year. Kumar said with fresh push in the retail segment, he hoped to take this to at least 15,000 customers over the next year.
A similar retail push is planned in other foreign branches in the US, Canada and Hong Kong, though the offerings will vary depending on the local demand.
SBI UK has until now focused on wholesale banking, with strong presence in syndicating external commercial borrowings and trade finance for imports from the UK into India. “After investing in core banking technology over the last five years, we are now ready to service a larger customer base in the retail sector in the UK,” Kumar said.