Banking on India

French bank societe Generale SA has its fair share of problems courtesy of the subprime muddle in the US. The second largest French bank, and Europe’s fourth-largest, was hit with a trading fraud of $7.5 billion—a sum that is bigger than its credit losses! But that didn’t deter SocGen from picking up a retail bank in Russia called Rosbank in February.

Away from the gloom in the West, Russia is among the top three markets where the French bank is pressing on the growth pedal. The other two are China and India. “We are bullish on India but at the same time extremely watchful in putting in place proper screening and collection processes,” says Eric Dhoste, Country Head (India), SocGen. A relatively new player in India, SocGen is expanding a recentlyacquired non-banking finance company (NBFC), has taken a step into investment banking in partnership with Ambit Corporate Finance for European M&As, and started a life insurance venture with Indiabulls.

SocGen isn’t the only financial services powerhouse that’s not getting bogged down in India by its woes in the West. Along with Citi, Credit Suisse, Lehman Brothers, and Goldman Sachs are also in investing mode in India. Even UBS, which has accumulated credit losses of $38 billion, has got the Reserve Bank’s nod to start a bank in India (UBS refused to participate in this story).

“We are bringing the entire firm to India, across all of our businesses,” says Brooks Entwistle, CEO of Goldman Sachs India. Adds Sunil Mehta, Country Head, AIG: “We have close to a dozen businesses in India and many of them were set up in the last 2-3 years. We are actually at a take-off stage.” Credit Suisse is also aggressively looking at India. It re-established in India stock broking operations and investment banking in 2007 and also a local wealth management business in 2008. “We view India as a strategic market for our franchise in Asia Pacific,” says Mihr Doshi, Country Head, Credit Suisse. Within the next three years, Credit Suisse aims to be one of India’s top three wealth management players.

—Anand Adhikari