Nxasana: Aim big
Johannesburg, Sept. 23: FirstRand, the South African financial services group, plans to start operations in India next year.
It will initially offer corporate banking, investment banking and private equity services. Later, it plans to venture into retail banking and insurance.
FirstRand, which has a market capitalisation of $12 billion, will be the first financial services group from the African continent to enter India. It already has a representative office in Mumbai and its application for a banking licence is pending with the Reserve Bank of India (RBI).
Sizwe Nxasana, CEO of FirstRand Banking Group, said the group was also planning to float an India-focussed fund that would invest in various asset classes, including real estate and infrastructure.
The group is looking to facilitate coal trading between Indian and South African companies by setting up a coal trading desk in the country.
Nxasana refused to say how much FirstRand planned to invest in its Indian operations.
Several factors influenced FirstRands decision to come to India: a booming economy that has been growing at over 9 per cent, growing trade between the two countries and the large Indian diaspora in South Africa.
The group hopes to leverage on its relationships with South African companies that are setting up shop in India. It also hopes to tap the lucrative business of remittances by non-resident Indians.
India provides FirstRand excellent growth prospects, Nxasana said, adding that the group expected to receive RBIs approval in the new year. Nxasana admitted the group had sniffed around for retail banking opportunities in India. However, any move in this arena was likely only 18 months after it starts its Indian operations.
We are looking to be in retail banking at the second phase of our entry. We are also exploring the possibility of working with other Indian retail banks, he said.