EFG International, the Zurich-headquartered global private banking group that manages $20 billion, is reviewing its India business. The company, which offers private banking and asset management services, manages around $500 million in India.
The move is a part of the private banking major's global overhaul, kick-started early this quarter. EFG International's group of private banking businesses currently operates in across 30 countries and accounts for around 2,500 employees.
"We have recently undertaken a detailed review of our business, with a view to resetting it and positioning it for controlled, profitable growth. As a result, we are exiting a number of businesses which are recording losses and/or lacking scale, and in which prospects are deemed insufficiently attractive on account of competitive positioning and the level of future investment required. We have looked at all of our businesses, and this naturally includes India," said a spokesperson for EFG International in a response to queries from Business Standard.
"Since the process is ongoing, I am not presently in a position to comment on individual businesses other than those mentioned specifically when we reported the initial findings of our review in October," the spokesperson added.
EFG International forayed into India in 2007, acquiring 75 per cent in Stratcap Securities India, which was involved in managing individual and institutional client relationships in mutual funds, fixed income and equities. EFG bought the stake in Stratcap from Strategic Capital Corporation controlled by its founder, Atul Sud. The company is a registered merchant banker with market regulator, Securities and Exchange Board of India. Stratcap Securities was rechristened EFG Wealth Management India and it accounted for 24 employees, including four client relationship officers and client assets worth $500 million. The company currently has 50 employees.
As part of the global review, EFG Bank AB in Sweden, along with its Helsinki operations, would be shut. Asset management and non-banking businesses would be transferred to Quesada, EFG International's profitable Stockholm-based wealth management boutique. Offices in Dubai and Abu Dhabi are also set to be shut, subject to regulatory approval, though EFG International would continue to target offshore/non-resident Indian businesses in the region. A number of offices in Canada have been closed and a public float has been planned for EFG Financial Products.
"A number of other loss-making/marginal offices would be exited, subject to negotiation and market timing. As a result, the number of booking centres and offices would be reduced meaningfully, enhancing profitability, sharpening focus and reducing complexity," said an EFG statement.