Major Indian financial services firms choose UK

The UK has a reputation as an essential base for leading Indian financial services companies, thanks to its status as a global economic hub.

The UK is an important base for Indian financial companies – as underlined recently with an announcement by New Delhi-based financial services giant, Religare Enterprises Ltd (REL).

In March 2010, Religare revealed that it would be doubling its London-based staff over the next three years. It also confirmed that Religare Hichens Harrison, the London-based stockbroking firm it acquired in 2008, would be renamed Religare Capital Markets (RCM) – a move designed to combine the company’s investment banking and institutional broking businesses.

This decision, as well as Religare’s new investment in London, was described as an “important milestone” by founding CEO and Managing Director, Sunil Godhwani.

Religare is just one of a number of important Indian firms to have invested in Britain in recent years. Indeed, a proliferation of Indian banks and financial services companies have set up UK bases, including major players such as Punjab National Bank (PNB), ICICI Bank Ltd, State Bank of India (SBI) and Infrastructure Leasing & Financial Services Limited (IL&FS).

The UK’s reputation as an international global financial centre and gateway to Europe, plus its world-leading talent-base, are all factors in their location decisions.

The Punjab National Bank started banking operations in the UK in 2007, opening its European headquarters in London. Its expansion continues apace with branches in Middlesex, Leicester and Birmingham, and a new branch shortly opening in Ilford, Essex.

The State Bank of India, meanwhile, is the largest commercial bank in India and the 50th largest bank in the world, featuring in the Fortune 500 list. It now has offices in 32 countries, and operates UK branches in London, Birmingham, Leicester and Manchester.

A global financial centre

ICICI Bank Ltd is India's largest private sector bank with a presence in 19 countries. Its UK subsidiary, ICICI Bank UK PLC, operates 11 branches, and has also established branches in Belgium and Germany. The bank was incorporated in England and Wales in 2003 and converted to being a public limited company in 2006.

ICICI’s enthusiasm for the UK market is well-known: in January 2010, ICICI Bank and UK Trade & Investment (UKTI) signed an Memorandum of Understanding (MOU), to help Indian firms capitalise on opportunities in the UK.

Suvek Nambiar, Managing Director and CEO of ICICI Bank UK PLC, notes that ICICI had long recognised the importance of a UK location.

He comments: “ICICI saw the UK as a key geography as it built out its international network in the earlier part of this decade. The historical links between India and the UK; the large Indian Diaspora requiring efficient financial links back to relatives and business interests back in India; the importance of London as a global financial centre and of the UK as a maturing market seeking greater competition in savings providers were all key drivers of our commitment to the UK.”

He added: “ICICI is committed to its UK customers, both through the established branch network and the online HiSAVE savings platform. Through the provision of simple, asterisk-free banking and competitive interest rates afforded by our low cost operations platform - we aim for measured growth in our UK deposit-base and in transactional volumes in our remittance and current account business.”

The best choice

There are many other Indian banks operating in the UK. These include the 104-year-old Bank of India, which was the first Indian bank to open a branch outside its home country, in London, in 1946. Export-Import Bank of India (Exim Bank) is a government-owned bank which relocated its European base from Milan to London. Bank of Baroda is a public sector bank which has been serving UK customers since 1957 and is now operating a network of nine branches. Canara Bank has had a presence in London since 1983; plus Manipal-headquartered Syndicate Bank also has an established office in London.

Yet as Religare has proved, it is not simply Indian banks which are investing in the UK. In 2008, New Delhi-based India Infrastructure Finance Company (IIFC), an institution which provides finance for infrastructure projects in India, opened its UK office in London.

Similarly, IL&FS Global Financial Services Limited (IFIN) – the investment-banking arm of Infrastructure Leasing & Financial Services Limited (IL&FS) – opened an office in London in 2009. IL&FS is a group of stakeholders – including Life Insurance Corporation of India, Abu Dhabi Investment Authority, Central Bank of India and State Bank of India – that is also developing infrastructure projects in India. Its London office has a mandate to “develop relationships and source new channels of financing for our clients and for the Group’s global and domestic initiatives.”

At a business reception celebrating London's strong links to the Indian business community in November 2009, Anil Kalra, Chief Executive Officer at IL&FS Global Financial Services, said: “The current economic climate has created a unique opportunity for us; with unrivalled access to markets, lower commercial property costs and an impressive talent pool that is now more readily available, London was the best choice for us to locate our European Headquarters. London continues to be a leading business destination for Indian businesses wanting to globalise, and we are looking forward to expanding our operations further in the UK’s capital over the coming years.”