Qatar's Royal Family in exploratory talks with Centrum

MUMBAI: The Royal Family of Qatar, promoters of Doha Bank, one of the largest commercial banks of Qatar, is in exploratory talks to acquire a minority stake in Indian financial services firm Centrum Group as part of the West Asian bank’s plans to expand its India presence.


As a first step, Doha Bank has signed a definitive agreement for a strategic tie-up to scale up its operations in banking, wealth management and foreign exchange, multiple sources with knowledge of the matter told ET.

“The strategic tie-up has been done. This is a prelude for a significant minority share purchase by the Middle East entity and discussions are on in this direction,” said one of the sources. However, the quantum of the stake or the amount of investment were not known.

The tie-up will pave the way for a mutual collaboration in broad areas of banking and wealth management services. This will help Centrum leverage the existing network and strengths of Doha Bank to scale up its presence in the Gulf Cooperation Council (GCC) countries while the Qatar partner will expand its footprints in India through Centrum.

Doha Bank Chariman Sheikh Fahad Bin MohammadBin Jabor Al Thani is from the royal family.

Emails sent to Centrum Group and Doha Bank CEO RSeetharaman remained unanswered till the time of going to the press.

Earlier in April, former Standard Chartered ace banker,Jaspal Bindra took a minority stake and became executive chairman of the Centrum Group. Since then,Bindra has been bringing in alliances and expertise that has helped the group enhance its global presence.

Launched from a 1,000 sq ft space at the Bombay Mutual Building in Fort in 1995 by Chandir Gidwaniand Khushrooh Byramjee, Centrum is an integrated financial services firm with presence in corporate finance, foreign exchange, wealth management, equity capital markets, debt execution, institutional broking and investment banking services.

Centrum has over 100 outlets spread across the country and more than one million retail customers with strong relationships in the mid-market corporates space.

The group also has an NBFC for retail lending and has applied to National Housing Board for a licence to foray into housing finance. It recorded a net profit ofRs 53 crore in the last financial year and a revenue ofRs 4,485 crore.

Centrum has built a robust wealth management and private banking business under a team headed byRajnish Bahl, who joined the firm half a decade ago from HSBC.

Earlier in June, Doha Bank, Qatar's fifth-largest lender by assets, said it plans to set up a wholly-owned unit in India.

In the last few years, a number of high-profile Indian-origin global bankers have returned to their roots after long overseas stints. These veterans are using their global clout and expertise to expand the width and scope of financial services groups in India. These include Vikram Pandit, former CEO of the world's biggest bank, Citi, who teamed up with ace rainmakerNimesh Kampani of JM Financial in 2013 after reaching the pinnacle of professional success in Wall Street. Guneet Chadha of Deutsche Bank is also planning to set up an NBFC in India.

The financial services sector in India is expected to reap benefits of a large macro economic recovery with investors betting high on the domestic banking and financial sector.

“NBFCs have largely had a much better run in terms of asset growth despite a slowing economy,” brokerage Sharekhan said in a note on August 22. “They have broadly been able to maintain asset quality despite the environmental stress and the impact of tighter 120 dpd NPA recognition norms. We believe that under-served and under-penetrated client segments represent strong value and growth proposition for well-run and focused NBFCs. We expect them to continue their strong performance in the medium term.”