RBL Bank is evaluating a possible entry into retail and institutional broking, asset management and other capital-market businesses as it looks to diversify beyond traditional banking, while also preparing to launch custodian and settlement services.
Mumbai, October 21 — RBL Bank is evaluating a possible entry into the broking and asset management businesses as part of its broader plan to expand its presence in capital-market activities.
Managing Director and CEO R Subramaniakumar said no final decision has been taken and that the bank is currently assessing which activities can be carried out internally, which can be handled at the group level and which may require separate entities.
He said activities such as an asset management company or mutual fund business, retail broking and institutional broking would need to be conducted outside the bank through specialised units.
The bank has not yet decided whether it would build these businesses from scratch or acquire an existing player.
Subramaniakumar said several plans remain under evaluation and it is too early to provide a timeline for final decisions.
RBL Bank is now a subsidiary of UAE-based Emirates NBD, whose group already has a presence in India’s capital-market segment. The bank will take those existing capabilities into account while deciding its strategy.
Separately, RBL Bank is preparing to enter the custodian and settlement services business.
Work on the new business has already begun, and management expects it could take around three quarters before the service becomes operational.
The lender has also started merger and acquisition financing on a small scale and expects the activity to expand over time.
RBL Bank is simultaneously investing in its wealth-management business, which was launched more than six months ago.
The bank already has relationship managers focused on wealth services and is now looking to deepen the business across both geographies and asset classes.
Subramaniakumar acknowledged that the proposed overhaul of insurance distribution rules by IRDAI could affect revenues if implemented in its current form.
However, he said higher business volumes could compensate for some of the impact and that the proposed regulations are not discouraging the bank from expanding in wealth management.
On the core banking business, RBL Bank expects its credit growth to be around four percentage points higher than overall banking-system credit growth.
Management also expects profitability metrics to improve.
The bank’s return on assets has increased to 0.92% from 0.4%, and Subramaniakumar said normalising credit costs and 25% growth in net interest income should support further improvement in net profit and RoA.
The bank also continues to expand its physical network.
RBL Bank recently opened 22 branches, taking its total branch network to 650, and plans to add another 30 branches before the end of the current financial year.
