Shinsei Bank is one of the most technologically advanced universal banks in Japan. Besides retail banking, the bank has a significant expertise in asset management, stressed assets, real estate and consumer finance businesses. Thierry Porte, president & CEO, Shinsei Bank, speaks to of FE about the bank's various plans to set up Indian ventures in asset management and in the asset reconstruction space.
You would be pleased to know that, in Japan today, there is a tremendous amount of interest in India. This year has been declared the Indo Japanese Friendship Year. The excitement shown by Japanese business and industry is reflected in the number of Japanese companies in India which grew 50 % last year to top 450.
India's financial markets have been attracting a lot of interest internationally. At Shinsei Bank we have been examining various opportunities in India for the past year or so. We feel that there is great potential to contribute to the growth of this country and do business here.
Shinsei Bank is one of the most successful and technologically advanced banks in Japan. Besides retail banking, the bank has a significant expertise in the asset management, stressed assets, real estate and consumer finance businesses. Shinsei bank has been ranked top in customer satisfaction for three years running among Japanese financial institutions (Nihon Keizai Shimbun).We feel that we can add value in India through some of these business lines.
The asset management business in India has significant potential. The growth rates exhibited by the industry are very encouraging and are following the pattern of other mature markets where this growth became exponential. This is an area where we believe that we can make a difference by leveraging our technological prowess.
In the stressed asset space, we believe that India has some great opportunities. In its earlier form, Shinsei Bank was a term lending institution which went through a reorganisation. The challenge of the restructuring exercise led the bank to develop capabilities which have been successfully used to develop a sophisticated stressed asset business. These capabilities have already been put to use profitably in Western Europe and East Asia. It is our belief that our experience in this field can be used in India too.
We have a strong partnership with UTI AMC and we have launched a co branded fund in Japan. This venture has been a great success. We look forward to the possibility of working with UTI in other areas too. The Shinsei UTI fund has an AUM upwards of $ 270 billion and is growing day by day. Various areas of co-operation are being considered with UTI.
We also plan to be an active player in the domestic asset management industry. We will be making investments commensurate with the requirements of this business. In the stressed asset area we are examining various possibilities and it is a bit premature to comment on our specific plans and the level of investments that we will make.
The structure of the entities that we have in mind for our businesses in India require us to set up joint ventures. We are in discussions with certain well respected institutions and individuals to explore these possibilities.
The Japanese financial sector is quite optimistic of the India growth story. However, this is not at all unusual in the world of today. Japanese investors are now clearly looking at India from a long term perspective. We see an increasing number of Japanese financial sector participants talking about doing business in India.
Japanese banks have historically been inward looking. Besides this, the Japanese banking industry has been through a tremendous upheaval in the last 10 years. This period was characterized by structural and regulatory changes in the sector, consolidations, and the emergence of the new age banks. It is only in the last few years that Japanese banks have started looking at going international in a more aggressive fashion.
Our views on the Japanese financial sector are cautiously optimistic. While we have emerged from the recession we will have to continue to tread cautiously.
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