Following their purchase of the private wealth business of Société Générale in Asia, Singapore's largest bank DBS looks set to make another acquisition.
For the DBS Group entering one of the worlds fastest growing economies, while their their own core markets are projected to yield somewhat insipid growth this year, could see the bank entering a vast new hinterland of potential growth.
With India penciled in by analysts to return a robust GDP growth number in excess of 7 percent for 2016 the purchase, if completed, could open up outstanding business opportunities.
Strong Onshore Franchise
As the Singapore based bank sits between China and India it would also make geopolitical sense to have a strong presence in both economic behemoths.
According to a report in the Indian Economic Times the RBS Indian business for sale is said to include a network of 10 branches, corporate loan platform and debt capital market, units. With the scale, progressive management delivery and cultural empathy DBS Bank would bring, the bank could leverage of this potential purchase to build a strong onshore franchise.
All That Glitters May Not Be Gold
India is about to launch massive infrastructure projects including the inception of a high speed rail network that could go on for decades and become a huge wealth and jobs generator. No doubt these large scale projects could also offer banks such as DBS, business openings.
However all that glitters may not be gold as the recent history of international banks who rushed into India has seen a great number of them close down, sell or re calibrated their Indian operations. Inconsistent political development and frequent regulatory challenges has seen foreign banks come and often go.
Dynamic CEO and Indian born
DBS, should they close the deal in India, would have a stronger chance of success than most. Under the leadership of respected CEO Piyush Gupta, who is Indian born but is now a Singapore citizen. Gupta is sanguine on the long-term fundamentals of Asia and seems tailor made to make such an acquisition succeed.
