Family-run Hinduja Bank, based
in Switzerland, which has been linked with KBC’s private banking
arm, is in discussions with several potential M&A targets,
according to group CFO Ajay Hinduja. This is part of the bank’s
expansion plans in the merchant banking, corporate and SME
financing and private banking arenas.
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Family-run Hinduja Bank, based in Switzerland, which
has been linked with KBC’s private banking arm, is in discussions
with several potential M&A targets, according to group CFO Ajay
Hinduja.
The bank, which bought Banca Commerciale
Lugano last month and was recently granted a banking licence in
Dubai, has emerged as a surprise contender in the ongoing
consolidation of the private banking market.
It is reported to have tabled a bid in excess
of €2 billion for Belgium-based KBC’s private bank KBL Private
Bankers. Ajay Hinduja, CFO of the Hinduja Group, the bank’s parent
company, told PBI a confidentiality agreement meant he
could not confirm or deny links to KBC but said the group was
interested in expanding its private banking business. The group is
currently in negotiations on “several” potential merger and
acquisition deals.
“Expanding our private banking business is a
priority,” he said.
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By GlobalData“Expanding in all of the areas I mentioned
earlier [merchant banking, corporate and SME financing and private
banking] is something we are continuously looking for. We believe
there is scope for expansion today. People need banks they can
trust.
“We believe we are bringing trust and safety
back into banking, which is essential. People have lost a lot of
faith.”
An acquisition of KBC, which has €47 billion
in assets under management, would make the Hinduja Bank
(Switzerland) (HBS) a significant player in the European wealth
management market. Last month, it paid over CHF100 million for
Banca Commerciale Lugano (BCL). It also recently received
regulatory clearance for a Category 1 banking licence from the
Dubai International Finance Centre (DIFC), allowing it to provide a
full range of banking services.
Hinduja, who would not give a figure for
assets under management at the bank, said HBS was not building a
business that would compete directly with other private banks,
however. He said the bank aimed to build a merchant bank which
provides a one-stop service to entrepreneurs operating in Europe,
the Middle East and South Asia.
HBS serves corporates, small and medium sized
businesses as well as individuals, providing advice from basic
business practices to M&A advisory and investors looking to
build up stakes in companies.
“It is merchant banking, but it goes beyond
advice and will be involved in funding acqusitions and
transactions,” he said.
“We are not just about advice and fees, but
will partner people in implementing their transactions.”
The bank has five Swiss branches, in Geneva,
Zurich, Lucerne, Basel and St. Marthrethen, and other offices in
London, Dubai, New York, Paris, Mauritius, Mumbai and the Cayman
Islands.
It also has a majority stake in Paterson
Securities, an Indian stockbroking firm.
“I believe it’s a model of unbiased advice,
where people get to share the ideas of investment which the family
is very openly willing to share with its customers,” said
Hinduja.
“Where we invest, we like to invite customers
to invest with us. The approximately 100-year track record of the
family shows we have not done that badly, and it’s something we’re
happy to share with the customers.
“They can benefit from that and the experience
of the group in markets which are not that easy to deal with. India
is one, the Middle East is another.”
Ajay Hinduja is the grandson of Paramanand
Deepchand Hinduja, who was an entrepreneur who set up the family’s
first business in Mumbai in 1914. He said the bank was primarily
aimed at third party customers, with only a couple of percent of
its business volumes related to other Hinduja Group businesses or
family members.
The Hinduja Group’s business interests include
Ashok Leyland, India’s second-largest commercial vehicle
manufacturer and Gulf Oil.
KBL Private Bankers presents an attractive
entry point into the European market for a number of players,
including Brazil’s Safra, Italy’s Exor and private equity firm KKR,
who are all reported to be interested. Julius Baer is also said to
be looking at the business.
