Private sector lender RBL Bank is "evaluating" a foray into the broking and asset management space as part of its move to expand capital market activities, a top official said on Wednesday.
Making it clear that no decision has been reached on the subject, its managing director and chief executive R Subramaniakumar said the bank, a subsidiary of UAE's Emirates NBD, will see which activities can be done internally, which can be handled at the group level and the separate units which it needs to form.
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"All the plans are under evaluation," Subramaniakumar told PTI, declining to share a timeline by when plans will be firmed up.
Activities like the asset management company or mutual fund, and also advisory businesses like retail broking and institutional broking will have to be outside of the bank through specialized units.
He said various plans are "under radar" and it is too premature to comment on any questions like whether the bank flush with capital will choose to acquire an existing player or build the business ground up.
A slew of its peers across both public and private sectors have dedicated subsidiaries engaged in such activities.
Subramaniakumar said the Emirates NBD group already has a presence in the capital markets space in India, and the bank will be taking the same into consideration while deciding its course.
RBL Bank is also proposing to enter the custodian and settlement services business, he said, adding that while it has started work on it, it will take up to three quarters to get it on the ground.
He also said that the bank has also started merger and acquisition finance in a small way already, hinting that the activity will grow with time.
When asked about its wealth management plans, Subramaniakumar said the bank is investing in the service launched over six months ago.
Stating that the bank already has a number of relationship managers to deal with the subject, he said the focus is now on deepening the activity both geographically and across asset classes.
Insurance regulator IRDAI's proposed revamp of distribution may have an impact on revenues if implemented as it is, but the increase in volumes will help compensate, he said, stressing that the norms are not a deterrent when it comes to expanding in the wealth management space.
The bank's overall credit growth will be 4 percentage points higher than the system's credit growth, Subramaniakumar said.
When asked about concerns over return on assets raised by a section of analysts, Subramaniakumar said the key metric is trending up, as seen in its growth to 0.92% from 0.4% and expressed confidence it will continue that trend.
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He explained that credit costs have normalised for the bank and net interest income is growing at a healthy 25%, which will help grow net profits and ensure RoA growth continues.
The bank opened 22 branches on Monday to take its overall network to 650 branches, the MD said, adding that it will be adding another 30 branches more before the end of the fiscal.
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