(Bloomberg) — HDFC Bank Ltd.’s wealth management business is looking to retail bankers to help cover its wealthy clients amid an industrywide talent shortage.
Boasting 6.47 trillion rupees ($77.2 billion) of assets under management, the wealth business is hiring retail bankers from inside HDFC as well as externally, according to Rakesh K Singh, group head for investment, private wealth and international banking and digital ecosystems at India’s largest private lender.
“Retail bankers know the customers, know how the customer behaves,” Singh said in an interview. The bank has been expanding its wealth team by 10% to 20% annually for the past few years, he said, but declined to comment on how many they plan to hire this year.
Mumbai-based HDFC’s wealth business has about 800 relationship managers serving customers in about 100 cities and towns, including often-overlooked markets like Jorhat in Assam and Salem in Tamil Nadu. However, further expansion may be curtailed not only because smaller towns lack enough high-net worth individuals but also because they can’t get the right talent, he said.
“Our learning is we don’t get people who can relate to a high net worth client in the same market,” Singh said of smaller locations which might otherwise hold some wealthy customers. “A person should be able to connect with an HNI to build trust with them.”
India’s roaring economy is creating fortunes at a remarkable pace, with the number of individuals with $30 million of assets expected to grow by 50% between 2023 and 2028, according to a Knight Frank wealth report. Along with a growing acceptance of professional wealth management, the growth is pushing banks like HSBC Holdings Plc and Barclays Plc to spend more resources capturing market share, making for a competitive hiring market.
The compensation being offered to relationship managers is a concern, Singh said, saying some were being offered salary hikes of more than 40% to 50% to switch employers. As more wealth units are set up and offer higher salaries to compete, the economics could suffer and some may fail, he said.
“The cost of capital has to be sustained,” Singh said. “My worry is it will come back to haunt us.”
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