UBS, Morgan seek slice of HNI market

A host of global financial majors, including UBS, Societe Generale, Morgan Stanley, American International Group (AIG), is looking to enter the wealth management business in India to tap the growing number of wealthy Indians.

The companies would be competing against established players such as Citigroup and Merrill Lynch to tap the market in India, which had 1,00,000 millionaires in 2006, up nearly 21 per cent from a year earlier, according to a Merrill Lynch-Capgemini report.

Global firms are exploring the opportunity arising out of rising markets, which grew at a CAGR of over 45 per cent in the last three years, propelling the stock market capitalisation of over $1 trillion.

A UBS spokesman said the firm was awaiting the regulatory approval from the Reserve Bank of India for launching private banking operations in India.

UBS would be offering an open architecture-based product (third party products) to wealthy Indians. Balakrishnan Kunnambath, managing director of SG (Societe Generale) Private Banking, said the bank planned to offer its own products as well as third-party products to clients based on the concept of 'what is the best' of each of its clients in India.

"We will have tailor-made solutions for individuals," he said. Sunil Mehta, AIG's country head and chief executive, said the group was exploring the opportunity to launch the wealth management business.

"Regulations permitting, AIG will be in those businesses, where we see an opportunity," Mehta said. Deutsche Bank, Citigroup, Merrill Lynch and Goldman Sachs are competing to tap wealthy investors in India.

The Merrill Lynch-Capgemini report said 9.5 million people globally held more than $1 million in financial assets in 2006, an increase of 8.3 per cent over 2005.

The wealth of high networth investors totals $37.2 trillion, representing an 11.4 per cent gain since 2005. India is second only to Singapore in registering the fastest growth in the millionaire club in 2006.