Johri: Widening scope

Mumbai, April 20: Singapore-based DBS Bank is set to make a foray into asset-based lending, nearly five years after entering the consumer banking business in India.

DBS will sell mortgages (housing loans) and loan against property (LAP) as it seeks to consolidate its consumer banking business and turn it around in the next calendar year.

The bank may also venture into auto loans and even unsecured offerings such as credit cards and personal loans.

Speaking to The Telegraph, Rahul Johri, managing director and head (consumer banking) at DBS Bank, said the lender would initially launch the two products in Mumbai and Delhi and later market it in other cities such as Pune, Bangalore, Calcutta and Chennai.

DBS, which targets only the affluent segment, has 12 branches in India. Its services in the consumer banking segment includes liabilities (deposits), alternate service channels and wealth management business. The bank’s consumer banking business serves more than 22,000 customers

On what took the bank so long to come out with a loan product, Johri said, “Our strategy has been a well-planned one. At DBS, we thought that it is more prudent to create a business wherein you first get in clients (liability customers) or wealth management customers, understand their behaviour and then start giving loans. This we feel, is a more prudent approach rather than lending money to somebody whom the bank does not know or does not have a relationship with.’’

DBS will be entering a crowded and a highly competitive market dominated by big players such as the State Bank of India, HDFC and ICICI Bank.

Johri, however, pointed out that the foreign bank would not focus on garnering market share but instead consolidate its existing client base.

In the first year, DBS Bank hopes to disburse close to Rs 200 crore of mortgages and LAP.

The bank hopes that the two loan products coupled with its other initiatives will help its loss-making consumer banking business break even in 2015.

DBS, which is a dominant player in Singapore with a strong presence in Hong Kong, believes that India, Indonesia, China and Taiwan will emerge as key markets over the next 10 years.

“We are not here for few years. The intent is to be a major player over the long term,” Johri added.

As part of its long-term plan, DBS Bank is exploring the possibility of adopting the wholly owned subsidiary model, which will make it the only foreign bank to do so. Johri said the bank would take a call within this year.

He, however, added that DBS Bank would remain a universal bank and had no plans to look at a differentiated banking licence.