Global banks on a hiring spree

Leading global private banks are in a tearing hurry to hire people. Even before getting the regulator's nod for banking licences, they have started engaging head-hunters.

Both UBS and the UK-based Coutts & Co have appointed head-hunters for recruiting relationship managers. Societe Generale of France, which is also yet to get a banking licence, has gone one step forward and picked up a vice-president (sales) and five relationship managers from ABN Amro.

ABN Amro, ING Vysya Bank, Deutsche Bank and BNP Paribas are already in the private banking space in india. Standard Chartered Bank proposes to launch private banking shortly, but is yet to obtain the necessary licence, confirmed the bank's spokesperson.

HSBC is also understood to be re-launching itself into this space, while Citibank has started the road shows for the same.

With so many players in the fray, salaries of relationship managers have skyrocketed. No wonder, when a leading international bank poached a team of relationship managers of a foreign bank in India, it doubled the salary for the team members.

A senior relationship manager's annual salary in some of the banks has more than doubled from Rs 20 lakh to Rs 45 lakh over the last one month, industry sources said.

ING Vysya Bank has been recruiting in a major way. It is offering a starting package of over Rs 10 lakh to relationship managers with five to eight years' experience. ABN Amro is also in an expansion mode after losing six out of its 41 personnel to Societe Generale.

"We have plans to increase the number to 50 shortly and in the next three years we will have 100 relationship managers," says Romesh Sobti, executive vice-president and country representative, ABN Amro Bank NV (India).

The phenomenal hike in salary may not be sustainable. "We have raised our salary structure to be in sync with the industry but the hike is not 100 per cent," says Sobti.

While private banking is seen as an emerging, sunrise industry, spreads in the domestic market are meagre, at about 1 per cent. In contrast, personal loans and credit cards offer as much as 5-6 per cent spread.

"In developed Asian markets like Singapore, spreads in private banking are as high as 3.5 per cent,' said a senior foreign bank official looking after private banking.

"People here do not pay for mere advice. Bankers make money through brokerage and commissions and private banking business is driven by growth and churning of assets," she added.