With over Rs 18,000 crore as funds under advisory, HDFC Bank sees private banking as a dominant growth contributor. Abhay Aima, group head, equity, private banking, HDFC Bank talks to HT.
Banks have been focusing on private banking for fee-based income. How has it grown for you and how do you see it influencing overall banking?
For us, the revenue from this business has grown to Rs 700 crore from Rs 20 crore six years ago. I see no reason for this segment to grow faster than the rest of the bank. I see it growing over 30 per cent.
What makes it so lucrative?
It is the kind of money that comes in. No balance sheet, no back office, no risk of bad loan and to top it all, almost the entire revenue goes to the bank’s bottomline.
How do you see traditional banking giving way to fee-based income?
It is a result of a rise in the number of salaried individuals with disposable income and traditional investors requiring professional advice. While this happened, banks faced the pressure to maintain margins. This came as a natural fit as banks could improve margins by offering more services.
Do you see private banking contributing to growth?
For any bank, fee-based business is more critical because of its quality. I see it as a dominant growth contributor.
Then why do you choose to grow slow?
Availability of right talent is one limitation. And since we are much ahead of the competition, while expanding you are tasting new territories all by yourself and hence you have to move ahead with caution.