American Express Bank is repositioning its Indian operations. Confirming the move, American Express Bank senior executive director Roderick Richards said, "The focus of the business is clearly on building as rapidly as possible a personal consumer financial service business as a counterweight to the traditional strength that we had in the corporate division."
For the corporate banking business, the bank is focussing on less credit intensive segments. The owner-managed business, which includes medium and small corporates, has been transferred to the personal finance services (PFS) division.
Amex Bank is looking at growing fee-based income and more business from its treasury operations.
"The bank will retain its strong traditional relationship with some of the bigger coroporates. The owner-managed business is being shifted to the PFS. We are looking at it as an additional channel for retail products," added Richards.
Rationalising the move, Richards said the bank wants to capitalise on its strong brand image by pushing its services to retail consumers within the relationships it already has with large corporates.
"The value of our corporate business is as an additional channel, and it gives us a clear opportunity to grow our personal finance service."
"Additionally, an owner-manager of a small business is fundamentally also the person who takes purchase decisions (for home purposes). He becomes an ideal target client for PFS," he said.
The bank is looking at earning more from its treasury operations. "Like other markets, the top end will go to the market directly, whereas the medium and small businesses will continue to rely on banking connections," said Richards.
The bank had posted a net loss of Rs 22.5 crore for fiscal 2000, on the back of heavy provisoning. The net NPAs of the bank have gone up to 6.20 per cent for the period, up from 4.32 per cent the previous year.
However, though the the bank will focus on retail operations in India, it is not looking at acquisitions here.
Says Richards, "We see opportunities in organic growth as it is more manageable, rather than purchasing or acquiring someone else's business."
Amex has received RBI permission for opening its fifth branch in Bangalore.
The bank has also centralised its treasury operations in India, and has downsized treasury operations in Mumbai and Delhi.
Confirming the move, Richards said, "There have been changes in the way the treasury business is being run globally and these have been made in India too. There are two teams now-- one focussing on balance-sheet managment of the bank and the other focussing on the client-driven corporate business."
