Indian bank expanding and recruiting in Africa

Banks from the developed world have long invested in emerging markets to diversify and find superior growth. But a new trend is for emerging markets institutions looking at opportunities in Africa. The Chinese are well-established, the Russians have made a mark, notably with Renaissance Capital, but 2011 might be the year of India.

This week the Indian trade minister has made a high-profile official state visit to South Africa, as two-way trade between the two countries is growing beyond expectations and MMTC, india' state-owned commodity trading enterprise, has opened its first African branch in Johannesburg's Sandton business district. South Africa has just been formally invited to join the Bric bloc, made up of Brazil, India, Russia and China and in April it will attend the Bric summit in China for the first time.

Against this background analysts expect business with India to increase in the next twelve months. One company has made a head start: Religare Capital Markets, the investment banking arm of Indian billionaire Malvinder Singh's Religare Enterprises. Last year Religare was given by the board a mandate to spend $1bn on strategic investments and since then RCM has been busy making acquisitions and recruiting people in Asia and the Americas as well as Africa.

The expansion has been driven by Martin Newson, a former head of global equities at Dresdner Kleinwort who is Religare's Ceo for global investment banking. "We are building an emerging markets investment bank," said Newson. "We need to create the management team that can cope with the international expansion we intend to pursue. It will be difficult for a local [Indian] player to break the US domestic market or the European domestic market in the next five years. But we will see genuine pan-emerging market players emerging over that timescale."

Religare's London office will be the hub for the global expansion programme. At the end of last year Religare acquired the UK operations of Barnard Jacobs Mellet, a highly-rated distribution platform for South African equities in the UK, serving over 100 institutional clients.

As well as taking over existing staff, headed by Dana Becker, country head of BJM UK, Religare has added research analysts to cover banks, telecoms and media and "expects further hires in due course". The acquisition, says Newson, "secures a beachhead for our wider Africa ambitions. Over the coming years we believe intra-emerging market deal flow will pick up significantly and we will be well-positioned for that."

South African recruitment experts say the Indian bank is setting up a local office. "It is early days to know what Religare will do, possibly partner with a local investment bank," says Mike Atter, associate director of recruitment consultancy Robert Walters SA. "It is interesting to think it will compete with Russia's Renaissance Capital, which last year bought Barnard Jacobs Mellet Securities in Johannesburg."