RBS Coutts eyes 30-50 percent India growth

By Nishant Kumar and Kevin Lim

SINGAPORE (Reuters) - RBS Coutts expects growing wealth in India will help its recently acquired unit there to boost revenues and assets by 30-50 percent annually over the next five years, a top executive said on Wednesday.

But Raj Sriram, global head of the South Asian private banking arm of the Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz), said the firm would not go on a hiring spree immediately to expand in a market that has attracted the likes of Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) and Credit Suisse (CSGN.VX: Quote, Profile, Research, Stock Buzz).

"There is a huge pie out there and it's a growing pie and I think there will be a place for every good player and every appropriate player to be there in the market place and make a niche," Sriram told the Reuters Wealth Management Summit.

He added efficiencies achieved through the ongoing consolidation of ABN AMRO's private bank, which it acquired in 2007, and RBS Coutts' brand would also help it achieve the growth from a small base now in the rapidly expanding Indian wealth management industry.

The number of millionaires in India rose 22.7 percent to 123,000 in 2007, the fastest in the world, as a robust economy and booming stock market boosted incomes, according to a report from Merrill Lynch/Capgemini.

The industry had been expected to quadruple its size to manage about $1 trillion in the next five years, according to a forecast by consulting firm Celent released at the end of 2007.

Since then, India's stock market has slumped about 45 percent amid the global credit crisis, after rising a stunning 500 percent in five years ending 2007.

RBS Coutts, which has a presence across five major Indian cities, is eyeing further expansion in the regions of Gujarat, South India and the Punjab within three years despite current market turmoil, Sriram said.

He said rising savings and investment products will induce many affluent Indians to buy wealth management products.

With one in every six human beings on earth, a 32-percent-plus savings rate and an economy still expected to grow at more than 7 percent, 42 million households are expected to line up for wealth management products in five years, up from 13 million now, presenting a powerful lure for global players.

"Within the existing pie, you have immense opportunities to grow," he added.

Sriram said RBS Coutts expects to begin offering private banking services aimed at market segments such as Bollywood stars in 2009, taking a leaf from its London office where special teams cater to different group of clients such as movie and sports personalities.

"Our general approach is to look at the most attractive segments and then gradually build.

"What immediately comes to mind is an entrepreneur-focused segment which is the backbone of private banking. In India, we will also be looking at movie stars and professionals," he added.

RBS Coutts also hopes to attract India's millionaire cricket stars, he said, noting that RBS last month got Indian cricket legend Sachin Tendulkar to become its global brand ambassador.  Continued...