Union Bank of India , a mid-sized state-owned lender, has plans to expand into investment banking to tap a growing global market in which increasingly aggressive Indian companies are acquiring foreign rivals.
Mavila Vishwanathan Nair, chairman and managing director, said in an interview that UBI planned to open offices in 10 countries by 2011 and would begin offering advisory services to corporate clients in about a year. He said the bank's ultimate goal was to get into investment banking.
One of the most profitable lenders in India , UBI also aims to build a larger international network. It opened its first full-service overseas branch in Hong Kong on Friday to take advantage of growing trade between India and China, which rose 56 per cent to $38.7bn last year.
"Many of our customers are operating in the global market," said Mr Nair. "They are acquiring companies. They need us to support them in their capital requirements and trade requirements. We will support their aspirations across the globe."
Undeterred by the credit turmoil, Indian companies have become increasingly aggressive in making cross-border acquisitions over the past few years.
Recent deals include Tata Motors' takeover of the UK marques Jaguar and Land Rover, whileBharti Airtel came within a whisker of purchasing South Africa's MTN in what would have been the largest acquisition by an Asian emerging markets company.
Bankers expect Indian companies to continue to shop abroad thanks to their strong balance sheets.
To benefit from this growing business and counter the slowdown elsewhere, global investment banks have turned to India and other Asian markets for deals.
More than half of India 's top 100 companies, including Tata and Reliance, have banking relationships with UBI - their businesses account for one-fifth of the bank's total revenue. However, many of them also use UBI's rivals.
To build a larger footprint, UBI is seeking to upgrade a representative office in Shanghai, opened in May 2007, to a branch next year. It has applied to open offices in Beijing, the southern Chinese province of Guangdong and Sydney.
Other countries in which it hopes to have a presence include the UK, Canada, New Zealand and Qatar. It is, however, not considering the US because, it said, it was "not very supportive of Indian banks".
Mr Nair said UBI's international operations would account for 20 per cent of both revenue and profit in a decade's time.
