StanChart receives nod to acquire UTI Securities

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Standard Chartered Bank Mauritius has received the Reserve Bank of India's approval to acquire a 49 percent stake in UTI Securities Ltd., an Indian broking house, from Securities Trading Corporation of India (STCI). P.R. Somasundaram, now Regional Head of Strategic Initiatives, South Asia, Standard Chartered Bank, will be Managing Director of the brokerage.

 

Standard Chartered has the option to acquire another 25 percent in 2008, and the final 26 percent in 2010, subject to regulatory approvals. The Bank is looking to make significant investments of up to $50 million over the next few years to 2010 to upgrade technology, implement top-in-class risk management systems, develop talent, strengthen the distribution network, in addition to enhancing the capital base.

 

It will re-name the company to reflect the shareholding. Both partners will agree on the re-branding to position the product offerings to the relevant customer segments.

 

"We are delighted with this development. UTI Securities will form a critical part of Standard Chartered's operations in India as it marks our entry into the equities trading space. It significantly enhances our offerings for our wholesale and consumer banking customers," Somasundaram said.

 

"UTI Securities has been one of India's finest brokerages since its launch in 1994. A professionally managed firm, it provides a strong platform for significant growth in this fast-growing segment. We are committed to building on existing strengths by investing in people, infrastructure, systems and the distribution network, including the on-line distribution channel, and ensuring that UTI Securities retains its pre-eminent position in the market," Somasundaram added.

 

A full-fledged financial intermediary with a presence in 60 major Indian cities, UTI Securities' core businesses of retail and institutional broking, investment banking and distribution of investment products boost Standard Chartered's wholesale and consumer banking offerings. Its online platform is also growing steadily.

 

UTI Securities' retail broking and distribution capacities offer transactional capabilities to Standard Chartered's Private Banking and Wealth Management customers. The brokerage's investment banking business strengthens the Bank's own through specializing in taking small and medium enterprises to the market, some of them for the first time.

 

Standard Chartered, which first announced plans to acquire UTI Securities in February, is set to roll out the process of integrating UTI Securities with the Group through staff engagement programmes and company climate surveys. The bank will draw from previous experiences including integration of Grindlays worldwide, as well as integrations in individual markets such as Hsinchu Bank in Taiwan and Union Bank of Pakistan. 

 

Sourced From: Standard Chartered Bank