'India will be among the top three markets'

For Steve Bertamini, group executive director and chief executive officer, global consumer banking at Standard Chartered, India is one of the most important markets. The bank can double its annual revenue to $1 billion within five years, Bertamini tells Business Standard in an interview. Excerpts:

How do you see the global environment this year, post 2008-09 for consumer banking?

2010 is better than last year, especially the first half. India and China continue to do well. We need to see how the year finishes out.

With stronger growth in the West is important for the East. There is still more spending power in the West that helps translate into potential growth in the East.

What's your assessment on the economies in Europe and the US?

Europe is in better shape than it was last year.

The biggest struggle in Europe and US is jobs. Many large companies in Europe and US, when they have a dollar to invest, are more likely to invest in the East, as opposed to the West. That makes it more challenging for those economies.

It makes it more difficult for them to recover as new investment is going to the East, as people believe there is more growth prospects for a longer period of time. It is good for places like India.

Are people back to borrowing and spending as they did in the pre-2008 period?

In the third category of investing, people are a bit more cautious. They are better informed and are more risk averse than any time in the past.

That also translates into people's willingness to take on debt. On the savings side the returns are lower, so people are in an awkward situation.

They are not getting the kind of returns they were used to and are not willing to take on more risk, and are cautious on how they borrow.

That creates a challenge and an opportunity for banks like us to get a disproportionate share of a competitive wallet, where people are lot more discriminate on where they invest their money and who they choose to bank with.

Which ones do you see as among your fastest growing markets?

India would be among our top three markets. China would be another one. India has had a material improvement in performance in any matrix - whether financial or non-financial. India has not only done better than its peers but also if benchmarked against many other countries across the globe.

Do you see your share rising or you see domestic banks – private and state-run — striking back?

What's good for us is that we still have a relatively small share. We have more to gain than to protect. This is a very competitive market. We are building franchise for a long time.

Any potential for inorganic growth?

Our strategy is predicted on organic growth. In a place like India, we can double the size of our business.

You can see our India franchise revenue doubling to $1 billion (Rs 4,691 crore) in five years time. The potential to double here is purely organic.

While on India, which segments do you see doing well?

The affluent, mass market and small- and medium-sector sector. In India, we have invested more in past 12 months than we did in prior three years.

We hired more people. Our aim is to hire 1000 relationship managers and we have hired 300 in the past 12 months. We invested a lot in branch network, training, technology and offside ATMs.

Hiring plans in India?

From a global perspective, we hope to grow RMs 20 per cent a year, or about 1,000 a year. In India, we had a big ramp up in past 12 months and will continue to hire.

70 per cent of our hiring will be frontline talent — RMs, personal financial consultants, portfolio advisors and wealth managers.

What kind of market share do you aspire for in India?

If we get 10 per cent in our chosen segments, we'll be delighted. If we could triple our share, and double the size of our revenues in the next five years, that'll be a phenomenal result.

The opportunity is there but whether we execute, whether the market behaves, whether the macro-economic environment remains positive, are things that are difficult to predict. We feel relatively optimistic that with the team we have and investments made, these are achievable results in next four five years.

Foreign banks were doing very well in the initial part of the retail boom until they lost out to private banks. Post economic slowdown, how to do you see the scene changing?

One area that had the biggest impact in India was unsecured debt. That got a lot of players in trouble since they expanded too quickly and aggressively.

That's one area at that time where we were laggards in growth and selective, and that turned out to be a good decision in the last two years.

Information from bureaus in India is getting better and it makes the market a lot more robust than it was four-five years ago. We see increase in risk appetite in India, industry begin to expand after a contraction in past 18-20 months.