DBS targets sharp growth over next 5 years; will expand presence

DBS Bank India is looking to treble its balance sheet size over the next five years from about Rs 50,000 crore currently and will be setting up around 100 customer touch-points over the next 12-18 months. Last week, the Reserve Bank had approved the Singaporean lender's proposal to become a wholly-owned subsidiary (WoS) and Monday it announced the official launch of its locally-incorporated unit--DBS Bank India.

The Singaporean lender is the largest foreign bank to become a fully-owned local subsidiary. "In the short-run, which is over the next five years, we want to grow our balance sheet three times. We crossed Rs 50,000 crore in 2018 and we think over the next five years, we can triple that," DBS Bank India chief executive Surojit Shome told reporters.

The lender's deposit base stood at Rs 30,000 crore of which the low-cost Casa stood at around 18 per cent and Shome said the plan is to take Casa ratio to over 25 per cent over the next few years. At present, its loan book is primarily corporate loans and retail constitute only around 10 per cent. The MSME book s slightly over that is the retail book, he said.

"Our aim is to get the share of our retail business both on the liability and asset sides to about 30 per cent of our revenue and profitability," Shome said. DBS, which operates in 12 cities--Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Pune and Nashik, among others, plans to establish over 100 customer touch points, a combination of branches and kiosks, across 25 cities in the next 12-18 months at an investment of Rs 125-150 crore.

This month, it will open nine new branches in Hyderabad, Ahmedabad, Coimbatore, Vadodara, Indore and Ludhiana. DBS group chief executive Piyush Gupta said India is very important for the largest lender from the city-state both from the capability creation and also for business expansion standpoints.

"Unlike other banks who want to stick to the top-end of the market, we want to go deep. We are convinced that for any bank to be successful in the long term in this country, it cannot be in the creamy layer. You have to go deeper into the market and it means that you have to be small and medium enterprise-led and you must have retail footprint and presence," Gupta said. Most foreign banks operate in the country as branches and since the 2008 global financial crisis, RBI has been insisting that those of them who want to grow faster should become wholly owned subsidiaries and that it will not allow any new branch licences.

It had also made it mandatory for those foreign banks with over 20 branches - only three now-StanChart, HSBC and Citi-will have to convert themselves to WoS if they want to open new branches. DBS is the second foreign lender to operate through the WoS model in the country after State Bank of Mauritius.

(With inputs from agencies.)