ISSN: 1391 - 0531
Sunday, March 04, 2007
Vol. 41 - No 40
Financial Times  

HNB looks overseas

Hatton National Bank (HNB), is exploring its options of entering India in the near future while also eyeing the region, South East Asia, emerging East Asia and some parts of North Africa.

‘We see India beckoning. It is right next to us with one billion people and that is an opportunity,” HNB CEO, Rajendra Theagarajah told The Sunday Times FT.

He said that while being optimistic on Comprehensive Economic Partnership (CEPA) where there is a plan to set up a bank in India together with some other banks, HNB is ‘scouting the streets’ and awaiting the right partner.

“Regardless of CEPA, we are looking at our options. CEPA is only one route. Theoretically there are other avenues such as picking up strategic stakes in Indian banks and the Non Bank Financial Services (NBFS) route,” he explained. Theagarajah said that in the strategic stake option there are limitations such as being allowed to acquire upto 74 percents, but voting rights are limited to only 10 percent.

He said the key element in retail small and medium enterprise (SME) banking in India is to have good distribution channels. “We are looking at all these options and awaiting the right partner. We are also looking at South East Asia, Middle East, emerging parts of East Asia and even Northern Africa,” he added.

He said that HNB will be further forging its foray into the Middle East.

“Presently our Middle Eastern strategy has been very partner driven.

There are two main segments low to middle income earners of the migrant workers and the upper middle end income workers,” he explained, adding that the former segment has a two to five year horizon and is serviced through a number of partner exchange houses.

“We also have the upper middle segment which we can service far better than we have.

We are identifying areas such as joint liability marketing with two to three of the other partner banks,” Theagarajah said.

He said that HNB has obtained permission from the Central Bank to manage a Middle Eastern exchange house, in addition to the on they already have. “We are awaiting that country’s approval to start operation,” he said.

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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.