wealthy Indian clients is heating up, both from domestic and
foreign competitors. Credit Suisse has just launched its wealth
services as more large domestic rivals also enter the country’s
projected $1 trillion wealth sector.
Credit Suisse has officially unveiled its wealth management
business in India, joining rivals like Citigroup, Morgan Stanley
and Merrill Lynch in seeking out wealthy clients. Credit Suisse
(CS) is targeting individuals and family-owned businesses that have
a net worth of at least $3 million, according to the bank’s India
country head Mihir Doshi.
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CS, which already has investment banking and securities operations
in India, plans to offer advisory services for domestic equity and
debt staffed by as many as 40 wealth management staff by the end of
2008, he said. CS is also to open offices in New Delhi and
Bangalore within three years. It currently has a dedicated team in
Dubai, London, Singapore and Zurich which caters to the needs of
non-resident Indian (NRI) clients.
The launch into India follows the awarding to CS of a portfolio
management services licence from the Securities and Exchange Board
of India earlier this year.
Doshi declared, “The establishment of a local wealth management
business complements our existing investment banking and securities
operations and will allow us to deliver the integrated bank to our
clients in India.”
According to CS estimates, the Indian market for wealthy
individuals is already of significant size, with an annual growth
rate of 30 percent. The number of households with bankable assets
over $1 million is expected to rise from 120,000 in 2007 to 300,000
in 2012. In the same period, total bankable assets in India are
expected to reach more than $1 trillion.
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By GlobalDataMeanwhile, Barclays Wealth is planning to launch its operations in
the country in the next few months.
It has identified five centres in the country in which to set up
offices in the initial phase and has targeted to recruit 100
professionals in the next year, Barclays Wealth India chief
executive Satya Narayan Bansal said. These centres are Mumbai,
Chennai, Kolkata, Bangalore and Delhi.
“We have presently 30 people on board, while the number would go up
to 100 in the coming 12 months,” Bansal added.
The Indian wealth management sector still remains “under-penetrated
and according to the most conservative estimates, the investable
assets available to the wealth management market in the high net
worth and ultra high net worth segment in the country is estimated
to be at $50 billion,” Bansal said. Barclays will focus on
individuals with an asset base of at least $2 million.
Among domestic contenders for Indian clients, Stock Holding
Corporation of India (SHCIL), the country’s largest custodian and
depository participant, is to enter the wealth management arena as
part of a major diversification plan.
SHCIL chairman and managing director RC Razdan said his company’s
wealth business plan would be ready within three months, saying
that “there is a huge potential for both stock broking and wealth
management businesses in smaller towns and cities.”
The 200 branches of SHCIL will be used for marketing wealth
services. The group has its own brokerage SHCIL Services, which is
a member of both the Bombay Stock Exchange and the National Stock
Exchange.
Separately, Indian brokerage and funds distribution group Reliance
Money is aiming to expand its international network and enter
full-service wealth management in order to earn as much as 50
percent of revenues abroad within five years.
The company is part of the Reliance-Anil Dhirubhai Ambani Group,
one of the country’s major two business houses with a market
capitalisation equivalent to $75 billion.
In one of its first moves abroad, Reliance Money has tied-up with
Hong Kong-based Goldride Securities for distributing financial
products and services in the Chinese territory. Reliance Money CEO
Sudip Bandyopadhyay said that his company plans to service the
entire Asian region through Hong Kong office.
It additionally plans to expand its operation in over 15 countries
spread across the UK, North Africa, the Middle East and South East
Asia by next March. The strategy will involve entering strategic
alliances with local brokerages rather than growth through
acquisitions, according to officials.
The company, with a customer base of 2.2 million, claims that it
has already become India’s largest broking and distribution firm
since its launch a year ago.
ICICI Bank is also extending its private banking expansion into the
higher net worth client segments, both domestically and elsewhere.
The bank has 250 relationship managers globally and plans to add
another 100, and has just rebranded its wealth management services
(see ICICI gears up for the global push).
“We already have 2,500 customers and are looking to add 1,000 more
in the next one year. We will be launching this product in all the
countries where we have a presence. Globally, this is a $30
trillion opportunity and is growing at a fast pace,” an ICICI
statement announced.
While a number of banks have thrown resources at cultivating an NRI
client base, the number of domestically-based Indian high net worth
individuals is growing at a faster rate, according to new analysis
by Standard Chartered. While India has 100,000 local millionaires
with their ranks growing by 20 percent annually, the number of
non-resident Indians is growing at around 15 percent.
Shiv Khazanchi, managing director and head of Standard Chartered
Private Bank in India, said regulatory changes have also played a
part in spurring personal wealth in the country.
Since the Reserve Bank of India eased international investment
regulations a few years ago, local Indians can now invest up to
$200,000 overseas so they no longer need offshore accounts, he
declared.
