UBS, Deutsche Bank target India’s rich as China’s appeal cools

The tilt towards India underscores how private banks are seeking to diversify revenue streams. PHOTO: REUTERS

SINGAPORE Global private banks are rushing to hire advisers for India’s rich, as China’s slowdown and a gloomier global outlook turn the South Asian nation into a bright spot for wealth management.

UBS Group, Deutsche Bank and Julius Baer Group are among companies hiring private bankers to serve clients from the world’s fifth-biggest economy, which has an estimated US$14.2 trillion (S$19.2 trillion) in wealth, according to Credit Suisse Group.

The tilt towards India, forecast to be the fastest-growing major economy in 2023, underscores how private banks are seeking to diversify revenue streams. In China, which led a boom in Asia’s wealth, a crackdown on a broad swathe of industries and delayed reopening owing to its zero-Covid policy, which was only recently dropped, have left clients nursing losses and reluctant to trade. Meanwhile, a recent regulatory easing is making it easier for India’s rich to move money offshore through corporate entities like family offices.

“The opportunities in India are vast,” said Mr Rahul Malhotra, the Dubai-based private banking head of global India and developed markets at Julius Baer, India’s largest foreign wealth manager. “We are witnessing increasing interest among resident Indian investors to build portfolios in international markets.”

Hiring plans

Julius Baer has hired at least six private bankers and executives in India in recent months. HSBC Holdings, which moved to shut its India private banking operations in 2016, is seeking a return in 2023 to become “the leading international bank” for the country’s high-net-worth population, said Mr Nuno Matos, the bank’s head of wealth and personal banking, in a LinkedIn post in December.

India’s wealth market consists of residents of the country as well as the so-called non-resident segment for the diaspora, which counts many millions globally.

UBS is hiring three private bankers in Singapore from Credit Suisse to cater to Indians overseas. Switzerland’s biggest bank said in November that it will strengthen its coverage of non-resident Indians, which it serves from Singapore, London and the Middle East. Nomura Holdings is also planning hires in Dubai to cover the same market.

Deutsche Bank recently hired Mr Nisheet Gupta from Standard Chartered in London as a managing director. The German lender said it has hired 44 bankers and investment managers for Indian clients over the last three years.

The business for overseas Indians “has seen revenues grow well in the double digits this year and will continue to be a key growth area”, said Deutsche Bank’s head of global South Asia for the international private bank unit Amrit Singh.

India’s stock market value more than doubled during the six years until end-2021, adding to the nation’s invested wealth.

That compares with an 89 per cent increase in the MSCI All Country World Index.

In August, India’s central bank relaxed certain rules on overseas investments, a change that is expected to lead more Indian investors to put money to work abroad, according to Mr Pranav Sayta, partner and leader of international tax and transaction services at EY India.

The hires to tap the subcontinent’s wealth are in contrast to shrinking global headcount in 2021 at some of Asia’s biggest wealth managers that disclose adviser numbers. The number of UBS advisers declined by 2.6 per cent in 2021 from a year earlier, while the number of Julius Baer’s relationship managers fell 7.4 per cent over the same period.

Richest Indians

India’s two richest people now rank among the world’s top billionaires. Mr Gautam Adani, the world’s third-richest person, is considering setting up a family office in Dubai or New York, Bloomberg News reported in November. A spokesman for the Adani Group denied the plan. Mr Mukesh Ambani, who controls Reliance Industries, and is ranked the eighth-wealthiest globally, is opening a family office in Singapore, Bloomberg News reported in October.

To be sure, some see India’s growth slowing.

Goldman Sachs lowered its forecast for the nation’s economy in 2023, citing a hit to consumer demand from higher borrowing costs and fading benefits from pandemic reopening. Its total wealth as estimated by Credit Suisse, which takes into account stocks and property, remains about six times smaller than that of China, which began easing pandemic restrictions in late 2022. BLOOMBERG

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