All the world's a stage

But emerging-market banks are still treading cautiously abroadFROM the rubble of Western banking it is easy to conclude that emerging-market banks are already big, getting bigger, and are coming to get us. Most emerging-market banks do have a sense that they are destined for great things. Mr Kamath at ICICI speaks for many when he says that in the medium term “we will see a clutch of Indian banks among the top 15 banks in the world.” Chinese and Brazilian firms are already there and Russia’s biggest bank is not far off. For all their scale and ambition, however, emerging-market banks mostly still derive only a tiny share of their profits from their foreign operations (see chart 11). How quickly might that change? Seen from the hot seat of an emerging-market bank, the world is a dangerous place. Western finance faces an onslaught of regulation and is likely to stagnate. The few investments that emerging countries have made in Western financial firms have tended to turn out badly—think of China Investment Corporation’s decision to put money into Blackstone’s bubble-era flotation, or Ping An Insurance’s stake in Fortis, which it was forced to write down after the Belgian bank failed. Those who declined invitations to bail out Western firms were proved right. “I did think I might do a big acquisition,” says Mr Bhatt of the time when he took over as chairman of State Bank of India in 2006. “Then the sky fell in.” He says he has had “a lot of offers but I have not taken them”. ...