State Bank of India boosts China network
State Bank of India is expanding its overseas operations, including its branch networks in Hong Kong and on the mainland, even though the global credit crisis has not yet come to an end.
Om Prakash Bhatt, the chairman of India's largest bank, said the decline of economic growth around the globe was temporary and a lot of data suggested it was coming to an end in many countries. Meanwhile, the economies of China and India were both doing well.
In Hong Kong last week to mark the opening of a second branch and announce that one more would be opened next year, Bhatt said SBI was positioning itself to take advantage of the rebound in the Hong Kong economy, adding that the lender's strategy of internationalisation was also dictated by the need to service its customers as they expanded their operations abroad.
'India is globalising at a faster pace than the rest of the world and more and more individuals and companies are looking for business opportunities outside the country,' Bhatt said.
SBI, which has more than 16,000 branches in India and about 130 branches abroad, was in a stronger position to support the move by Indian companies than its rivals as it had the largest distribution channel of all Indian lenders operating outside the country, he said.
On the mainland, the bank has a branch in Shanghai and a representative office in Tianjin.
Bank analyst Ritesh Maheshwari, a director at Standard and Poor's Ratings Services, pointed out that China was India's largest trading partner and the establishment by Indian banks of a presence in Hong Kong was largely to service India-China and India-Hong Kong trade.
Bilateral trade last year between India and China was up 34 per cent year on year to US$51.8 billion, though in the first half of this year it was down 32 per cent to US$19.61 billion amid the economic slowdown.
Bhatt said he expected SBI to qualify soon for a licence to offer yuan business to its clients, and added that the bank planned to upgrade its Tianjin representative office into a branch.
The bank has had a presence in Hong Kong for the last 30 years providing wholesale banking business, including trade finance and syndication loan.
Bhatt said the bank's expansion in the city not only because of the fast-growing Sino-Indian trade, but also because Hong Kong offers good business opportunities.