Chillin' out till it needs to be funded
While Banking seems to be equally interesting to all media, dominating most lifestyle, infrastructure and even Sunil Mittal’s dealmaking stories, the retail banks are never at the fore front of a lifestyle trend apart from being revered for the status symbol they are for their customers and partners. Banks, as always sceptical of all the talks of vision and policy as they hide the nations’ paper trail secrets from the next generations, are predisposed towards safeguarding their own house.
As recovery kicks in from Australia to even the USA, AIG has found only a single buyer for its Asia business from China to Australia; JPM and Goldman Sachs have agreed to grow in China, India and a dozen other Asian ‘hamlets of prosperity’ and done precious little, while India’s banks sit on its reserves of $1.2 T wary of corporate borrowers esp after Real Estate provisions are increased to 175%. While SBI and PNB curry favours with the government, the Private sector leaders have decided to step up their retail finance structure.
Auto loans and Home loans are now costlier by 50bps to 100 bps for HDFC and Kotak Bank, ICICI Bank and others to follow soon. SBI and PNB are leading the lower cost of deposits plan and will follow much later, esp as their mortgage markets are responding and those confined to Delhi , Mumbai and the big cities cannot look forward to any large ramp up in these markets where real estate is likely to be depressed the rest of 2010 and some 2011.
The lack of depth of the local securitisation market, the prevasiveness of low cost housing and the lack of imagination on each part has left the consumers without access to the advantages of a growing economy, while the seemingly unaffected by status symbols consumer of public sector banks is busy saving with whatever products are on offer. This stoy is getting so old and sonorous, there will soon be a break in the sky, with someone like ICICI and HDFC Bank Credit Cards caught in the act literally.
For one, someone can use the market segmentation to start discovering a differential price structure rather than dviding the poor customers between the SBI & BOB vis – a – vis Citi and HSBC. All significant product innovation by StanChart, HSBC and even Citi mostly limited to either the very Wealthy who can buy a Smart Home loan , or a very tech savvy yuppy crowd at the IT/BPO offices with contactless payments and Suvidha accounts.
On the Brokerage and Insurance fronts, Online trading and unit Insurance accounts have been almost fully exploited in the metro markets, each city offering annual additions in unit $ Billions, higher in Delhi and Mumbai. If you let me the operation, I could get the Treasury to talk to Marketing