UBS has only one branch in India. In February 2008, it had received the Reserve Bank of India’s (RBI) approval to upgrade its representative office into a bank branch. The lender had commenced its banking operations in India from January 2009 after getting necessary clearances from the banking regulator. However, according to sources, the foreign lender has now decided to surrender its banking licence in India. It will exit the fixed income business but will continue its equity and investment banking operations here.
The move is part of UBS’ global strategy to focus on its core strengths in different markets and operate ‘capital-light’ businesses. Sources said the process of winding down UBS’ banking operations here was expected to be completed in two years. In 2012-13, UBS India’s interest income grew by 17 per cent from a year ago to Rs 427.5 crore.
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The bank also made a profit of Rs 48.6 crore on sale of investments compared to a loss of Rs 4.6 crore in 2011-12. However, its loss on exchange and derivative transactions widened to Rs 105.2 crore from Rs 84.2 crore during the same period. The earnings were also aided by tight cost control as the Swiss lender pared its operating expenses by 5.4 per cent.
Payments to and provisions for employees were also trimmed to Rs 54.8 crore from Rs 59.4 crore. According to media reports, UBS’ decision to exit fixed income business in India would result in 50 job losses.
According to RBI data, UBS had 57 employees at the end of March 2012. The present headcount of the bank in the country was not immediately known. UBS India closed last financial year with a capital adequacy ratio of 52.86 per cent. Its capital adequacy ratio was 53.75 per cent at the end of March 2012.