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SBI-Societe Generali arm to offer custodian services for gold ETFs

Mumbai: SBI-SG (Societe Generale) Global Securities Services, a local custodian service provider, is set to offer custodian services for gold ETFs, a niche dominated by Bank of Nova Scotia.

The custodian’s assets under custody (AUC) have jumped to $100 billion in September from over $70 billion a year ago as it gears up to gain market share on a par with its overseas peers.

“We aim to achieve AUC of $200 billion in the next three years,” said TVS Ramana Rao, managing director & CEO at SBI-SG Global.

“We started taking large strides during the past two years as India aims to be a $5-trillion economy. Future expansion of the economy will provide more opportunities with international investors taking keen interest in India. We take this as an opportunity to grow, especially with uncertainty surrounding certain other entities operating as custodian in India.”
SBI-SG is a joint venture between State Bank of India and Societe Generale Securities Services, the second largest global custodian in Europe in terms of AUC. SBI holds 65 per cent stake in the JV. SBI-SG had commenced operations nearly a decade ago. “We are now set to start offering custodian services for physical gold as we aim to make good business in the niche,” said Parminder Singh, chief financial officer at SBI-SG Global. “During the last year, we have also focused on technology upgradation to align our services with international best practices, on a par with leading global custodians,” he said.

The company has begun to hold overseas roadshows wooing global investors to local markets. It is already in talks with some large sovereign/pension funds and asset managers.

SBI-SG serves clients including foreign portfolio investors, foreign venture capital investors, foreign direct investment, and domestic investors such as mutual funds, pension funds, and Alternative Investment Funds.

“We are also looking to leverage the global presence of the two JV partners to attract foreign clients,” said Rao. The SBI subsidiary has been providing custodial services to eight mutual fund houses, including two among the top five. Besides, the company also offers fund accounting (FA) services for mutual funds and AIFs.

SBI-SG looks to report a 60 per cent yearon-year rise in net profit for the half year ended September. The return on equity, a gauge for shareholders’ profitability, is tipped to touch 70 per cent in FY20.