Public sector Union Bank of India opened its British subsidiary on Friday, with plans for a balance sheet of up to $1 billion in the next few years, and the potential for further expansion into Europe.

Freedom to expand

Opening a subsidiary, regulated by Britain’s Prudential Regulatory Authority, would give the bank freedom to expand its branch network in the UK, as well as into the Euro area, Union Bank Chairman Arun Tiwari said on Friday, ahead of the official inauguration of the subsidiary by Union Finance Minister Arun Jaitley.

While the subsidiary is set to have a balance sheet of around $150 million in it’s first year of operation, this could rise to between $800 million and $1 billion in the next few years, he said. “We want to grow steadily but not aggressively,” said Tiwari. The bank received the approval to set up the subsidiary in July last year. Last year, the UK overhauled the regulations governing foreign banks operating banks — pushing them towards acquiring subsidiary status as part of efforts to toughen up governance and strengthen stability of the banking system.

Focus on funding

The bank said it would focus on funding large corporates and British small and medium sized businesses, as well as retail customers — targeting those beyond the Indian Diaspora and Indian corporates. “We don’t see London just as a place to do business but as a gateway to the global market,” he added.

The PSU began overseas expansion in 2007, with offices in Dubai, Hong Kong and Sydney. It has had an office in Britain since 2010 but has been cautious on expanding.

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