- The first foreign bank in UK to ringfence retail division
State Bank of India UK (“SBI UK”, “the Bank”) has announced it has launched its UK subsidiary, State Bank of India (UK) Limited – effective from 1 April 2018, following an initial capital commitment of £225m from its parent bank.
It will be the first foreign bank in the UK to ringfence its retail division from its wholesale business – and follows on from Barclays’ recent High Court approval to ringfence its retail activities. The ringfencing and subsidiarisation of the retail franchise SBI UK, the State Bank of India’s largest overseas operation, offers the Bank’s UK customers stability and reassurance amidst continuing uncertainty around the UK’s decision to leave the European Union.
As many banks reassess their relationship with the UK market, SBI UK is confident that London continues to remain the preeminent financial capital for institutions seeking a gateway to a global presence. In addition to being one of the largest banks in the world, SBI UK is proud of the fact that it is the largest Indian bank in the UK.
Lord Mayor of the City of London, Charles Bowman said:
“The State Bank of India is a treasured partner of the City, having first opened an office in the Square Mile back in 1921. I’m therefore delighted the organisation is expanding its operations in London.
“The move is a reflection of the continued strength of UK-India ties, particularly in financial and professional services. I look forward to further building on our 100-year relationship with India’s largest bank.”
The Prudential Regulation Authority’s push for banks to establish UK subsidiaries protects depositors in the UK from uncertainties in foreign markets and will help to prevent a repeat of the financial crisis, by ensuring that banks have enough capital to support their business. The costly move has caused an industry uproar, leading the existing foreign-owned branches to reassess their presence in the UK. However, SBI UK believes that the restructuring is a major endorsement for London as a financial capital of the world, despite uncertainty triggered by the Brexit.
Mr Chadha, Regional Head of SBI UK, said:
“We are extremely proud of how far the bank has come from the first time it opened its doors to UK residents in 1921.
“The launch of our UK subsidiary shows our commitment to operating in the UK market. Many banks primarily see the UK as the gateway to Europe and are fazed by the impact of Brexit. Our calculus is different. We see London as the ideal launch pad for a global presence and have full faith that, despite Brexit, London will remain the premier international financial centre.”