Stanchart to buy remaining 26% stake in UTI asset: CEO

“We are committed to complete 100 per cent acquisition in the renamed entity by middle of this year. This is in sync with the decision to enter corporate equity business,” Stanchart PLc’s CEO (India and South Asia) Neeraj Swaroop said.

He,however,did not talk about the valuation and cost of transaction for making the brokerage firm a wholly owned subsidiary.

Stanchart had in August 2007 acquired a 49 per cent in brokerage firm UTI Securities from Securities Trading Corporation of India (STCI). Under the agreement with STCI,Stanchart had the option to raise its stake to 75 per cent in 2008 and,if both partners agree,to 100 per cent by 2010.

The core business of erstwhile UTI Securities comprised retail and institutional broking,investment banking and distribution of investment products.

With its presence in 60 major Indian cities,the acquisition is expected to boost the wholesale and consumer banking offerings of Stanchart.

UTI Securities’ retail broking and distribution capacities offer transactional capabilities to Standard Chartered’s Private Banking and Wealth Management customers.

As part of the expansion programme in India,Standard Chartered,which filed for IDR earlier in the day for raising over USD 500 million,will enter the corporate equity business segment with specific focus on IPO market.

“We would participate in the IPO for Indian corporate by assisting them through institutional broking. We would provide solution for corporate equity,” Swaroop said.

Asserting that India,which contributes to 20 per cent of Stanchart’s global profits,would continue to be the focus area,he said that this year the bank would enter a host of specialised corporate equity services to assist IPOs,brokerage and equity solutions to the Indian industry.

He said the bank already was catering to over 1,500 Indian corporate and over two million retail clients and that entry into this segment as also consolidation into wealth management made good business sense.

“We cater to 1,500 local corporate and we have two million retail customers. We would like to participate in the India growth story by increasing presence in mortgage lending,consumer banking,wealth management and SMEs,” Swaroop said.

Stanchart has over 94 branches in 37 cities in India,which is its second largest market after Hong Kong.

Swaroop,however,said that the bank would not focus on areas like personal loan,car loan and credit card,as these areas posed credit risks.

“It is a matter of emphasis. Our model is not on high risk and we feel there is over lending in some segments…

But,it is not that we are not present in these areas. We have over two million credit card holders,” he said.