The Commercial banking firm under the Ministry of Finance of the Government of India (GoI), Bank of Baroda (NSE: BANKBARODA), is hiring over 850 customer relationship managers and executives to enhance its wealth management division to tap into the expanding sector all over India.
Through means of cross-selling to the roughly 2,50,000 affluent clientele who currently have accounts with the banking institution, it aims to increase its Assets Under Management (AUM), also known as funds under management, by three folds, to more than INR 85,000 Crore from INR 30,000 Crore in the coming 5 years.
Virendra Somwanshi, who is the Group President and Head Wealth Management of Capital Markets and NRI at the Bank of Baroda group, made a statement saying that a new and fresh wealth management business vertical is in the works for the Middle Eastern country, the United Arab Emirates (UAE), as well, where the bank would cater to the large affluent diaspora there.
He further stated that they had put products, human resources, and tech in the 30 leading Indian cities in the past couple of years. In the current Fiscal Year (FY), they intend to become one of the ten leading income-generating banking institutions and be positioned as the leading four in the sale of life insurance.
The Bank of Baroda generated revenue in the wealth management sector of INR 315 Crore in 2021 – 2022 and is anticipated to reach the INR 1,000 Crore threshold in 2023 – 2024. While banking institutions such as Axis Bank Limited (NSE: AXISBANK), HDFC Bank Limited (NSE: HDFCBANK), and many others have Assets Under Management (AUM) of about INR 90,000 Crore each, and the multinational public sector bank and financial services firm, the State Bank of India (SBI), oversees the assets valued at around INR 1.3 Lakh Crore, the Bank of Baroda is just a minor player in this segment. Nevertheless, according to Virendra Somwanshi, the Bank of Baroda has many affluent customers who have not been approached yet and have a strong relationship with the banking institution that might be further expanded.
Furthermore, there will be a rise in the number of wealthy individuals in India if the country’s Gross Domestic Product (GDP) surpasses 5 Trillion US Dollars. The Bank of Baroda has a high potential unaccompanied by the requirement for additional capital or the chances of Non-Performing Assets (NPAs).