Summary
Why would SBI want to invest in the UK? If I was an advisor to SBI that would certainly be the last place I would focus on.
Why?
No synergies. Too expensive.
Although I suppose there is a certain element of pride in attempting to buy into the backyard of a country that ruled and humilated India for too long, there are better international strategies for SBI.
Analysis
Apart from trying to reach the Indian community in the UK I see little interest in buying a bank in Great Britain.
If I was SBI I would focus on the Americas- US, Canada, Mexico, Brazil, Caribbean, Argentina, etc... New York should become its hub in the Americas. GDP growth rate of that region is much higher than Europe.
SBI could learn from what Scotia Bank has achieved by expanding carefully its operations from Canada to Mexico and the Caribbean. Valuation/ financial ratios in the Americas are much lower than in 'hyped' UK and regional banks offer much better growth for the next ten to twenty years.
According to certain data, close to 26% of non-resident Indians live in the Americas, versus around12 % in Europe
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
