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Updated – March 06, 2025 at 04:59 PM.
Tell us about Mashreq’s India presence
We have grown well in India. In 2024, our total assets globally increased by 11 per cent year-on-year to AED 267 billion, driven by loan growth across wholesale and retail financings. In India, the growth rates were higher than global. As a result, we secured further capital of $150 million in the form of tier-1 Bond in the country in November to support our future growth. India is a focus market and there are growth plans for the business, as the country is also among the fastest growth economies in the world.
We started operating in India in 1980 and our corporate banking business began in 2016-17. We have already become an important bank to some of the largest corporates in the country. India is currently the largest international business for Mashreq. India contributes to about 25 per cent of our international assets, and we aim to grow the asset base in India. We also have the multinational business and a growing financial institutions business. We possess the complete set of products from trade finance, markets, financing and international debt capital markets, to meet our client requirements. We also have a Global Capability Centre (GCC) in Bengaluru, called Mashreq Global Network, to support the bank’s global operations. In January 2025, our board approved setting up a branch in GIFT city, Gujarat. Our target is to get it up and running this year, subject to regulatory approvals in both countries.
What are the expansion plans in India?
At the start of the year, we did a $1.1 billion bond issuance for one of the largest global natural resources and technology conglomerates. I would say our strategy is both acquisition of new customers and optimisation by doing more for existing customers. We are a client-centric organisation and as we speak, we are also hiring new people given the expanding customer base and needs. The strategy of corporate banking is being industry agnostic; we look at industries like oil and gas, autos, metals and mining, infrastructure, real estate, services, chemicals, textiles, pharmaceuticals, consumer durables, etc. Our focus is more towards global industries which have an international linkage. Again, we are a conduit to getting more and more multinationals in the country.
How is the financial institution business growing?
Last year we did the $750 million syndicate loan for SBI, where we got a lot of Middle Eastern investors and similarly in the bond issuance in January 2025 too. Now there is a concessional duty which has come from imports on gold from the UAE, so we are thinking of setting up a gold leasing business. We are very active in AED clearing and work closely with the Indian banks.
How does the bank benefit from India-UAE partnership?
As you know, there’s a healthy partnership between India and the UAE. I think it’s an exciting time for India-UAE partnership. Our Prime Minister has visited the UAE several times last year. The UAE royal family, and various members have visited India. They’ve signed a treaty to do a $100 billion non-oil trade between the two countries, primarily driven by the Comprehensive Economic Partnership Agreement (CEPA) signed between them. So, we as a bank are well positioned to support that because there are a lot of UAE companies who are coming to India. There have been a lot of agreements in terms of pharmaceuticals sourcing from India, setting up food parks in India, and other infrastructure projects. Lot of the Indian companies are setting up manufacturing and other facilities in the UAE. The trade between India and UAE is growing and Mashreq as a bank can play an important role on both sides, in India and the UAE.
How easy is it now to raise funds overseas as corporates are saying it is a challenge?
That is true. But that’s where diversification to the Middle Eastern market helps. Middle Eastern investors or banks have the ability to fund large amounts and can play an important role in financing. Mashreq is helping bring this liquidity or market to the Indian clients. As global liquidity is becoming tight, and people are becoming more and more focused on that, this is a new pool of liquidity which we are bringing to the Indian corporates from that perspective. We have a very big wealth business in the UAE. So, our wealth clients in the bond market, they put in the money. Then there are sovereign funds, there are family offices, there are banks. So the Middle East pool is, I would say, pretty deep.
And are the terms easier in terms of coupon?
In large syndicate transactions, you have a blend of global investors including Middle East investors. A diversified pool of investors helps on the coupon.
There are talks about private capex slowdown in India…
We are seeing a lot of growth in the metals, mining, infrastructure and oil and gas space. What is getting published is more in the consumer durables segment. But on the back of all, the infrastructure spend which the government is doing, hopefully now private sector capex is also picking up. Even consumer hopefully should come back with some of these measures of the recent reduction in personal income tax.
Why are foreign banks not able to increase their market share in India?
India is a very evolved market. Fortunately for us in India, both private and public sector banks are well developed and some have become almost equal to global banks in market cap. So I would say that foreign banks are continuing to play an important role specially in foreign capital on the road to becoming the third largest economy. I don’t think anything else is required from the government side, they have been very supportive. Like Gift City, we had the option of setting up something similar in other countries. But we chose Gift City here because of the environment and the ecosystem which the government has created. Thus, it is up to the banks to sort of grow and develop.
Have you planned any acquisitions this year as there are two large banks on the block?
Right now we are more focused on organic growth, as there is enough room for us to do that currently.
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