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Westpac Banking Corporation, Australia's oldest lender which operates in India with a sole branch with a focus on wholesale and institutional segment involved in trade and investments, is looking to reap benefits from the increase in Indo-Australian trade which is expected to double by 2020.
According to its estimate, bilateral trade between India-Australia could double in the next five years from approximately $17-18 billion reported in 2014.
"India is an important trading partner for Australia. The bilateral trade between Indian and Australia mainly constitutes import of coal and natural resources from Australia. Going head also the demand is expected to remain strong with the focus on smart cities and industrial corridor and the urbanization project being undertaken in India. As a result demand for power and steel will increase and it bodes well for the trade relation between India and Australia. Our bank's stratgey is to connect business consumers on either side," said Vikram Nimkar, Country Head-India, Westpac.
However, with the trade flows growing between India and Australia and business expected to pick up, the bank is now increasing its investment in technology and infrastructure.
"We have chosen to grow in a calibrated manner so far. But we are investing in technology and infrastructure and have doubled the team size (currently 40 in India). Our initial capital was much more than the minimum required capital which shows that the idea is not to be conservative and we want to grow in India. Now that green shoots are visible we will also be more visible in the market," added Nimkar.
Prime Minister Narendra Modi who visited Australia last November and meet his counterpart said Australia has immense opportunities to participate in India's progress in sector like mining, infrastructure, manufacturing, energy, among others.
Westpac got the licence from Reserve Bank of India to commence operations in India in 2012 said the retail business is not a part of its near-term strategy. Rather, the lender wants to continue with its focus on wholesale and institutional business and has ruled out mass retail business for now.
"As our capabilities outside India is mainly wholesale and institutional we want to stick to it. By the time you expand branches
and build capabilities it will take time in mass retail. Wholesale is easier as you already know the companies. So outside Australia our focus has mainly been large corporate, commodity buyers," said Axel Boye-Moller, Head-Global Transactional Services for Asia, Westpac Banking Corporation.
Some other foreign lenders have not had a good experience in the competitive retail market in India. Lenders such as Barclays and Royal Bank of Scotland had also exited the retail business in India and consolidated their position.
At the end of September 30, Total Assets of Westpac Banking Corporation were around 770,842 million Australian Dollar. (Rs 37.13 lakh crore). (End)
