Financial Daily from THE HINDU group of publications
Saturday, Sep 17, 2005
Money & Banking
ING Vysya Bank bid to expand portfolio assets
Bangalore , Sept. 16
ING Vysya Bank has begun expanding its private banking operations into tier two cities in a bid to expand the portfolio of assets.
Speaking to Business Line, ING Vysya Bank's Country Head (private banking), Mr Steven Billiet, said that a dedicated branch would start functioning in Pune soon. This would be further expanded to Kolkata, Chennai, Hyderabad and Kochi as well, he added. Private banking branches are currently operational only in Mumbai, Delhi and Bangalore.
Private banking involves wealth management and portfolio management services and focussed on high networth individuals (HNI) where the minimum asset size would be in the region of about Rs 2 crore.
ING Vysya is not the only bank to offer private banking services. Most foreign banks in the country offer such services to high networth customers though were largely confined to the metros.
He said the number of exclusive branches would not limit the growth in customer acquisition for private banking.
"We will leverage on the bank's branch advantage to expand the customer base.Most branches of ING Vysya Bank would be equipped to provide this service," he added. This expansion would allow for a quantum increase in the assets under management.
At present, ING Vysya Bank has about Rs 1,000 crore of assets under management. Mr Billiet said that the bank hoped to grow the assets under management upwards by at least 60 per cent during the next two years. By 2006-end, the bank hoped to have at least Rs 1,700 crore assets under management and Rs 2,300 crore by 2007, he said.
The portfolio management services, he said, had generated returns close to 15 per cent for its customers. ING Vysya's investments were made cautiously with the purpose of offering steady returns. Most investments were on long-term, Mr Billiet said. At least 60 per cent of the assets were in debt securities. These included bonds, fixed deposits and other fixed income securities. The remaining 40 per cent was in a combination of mutual funds, equity and insurance sectors, he added.
While the returns on the portfolio management services had outperformed the stock market, they were lower than some of its competitors.
Mr Billiet said that this was because ING Vysya preferred to insulate customers from high risks and excessive volatility. For these same reasons, ING Vysya's private banking also preferred to avoid the commodities and derivatives markets, he added.
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