Global private banks are rushing to hire advisers for India’s rich, as China’s slowdown and a gloomier global outlook turn the nation into a bright spot for wealth management.
(Bloomberg) — Global private banks are rushing to hire advisers for India’s rich, as China’s slowdown and a gloomier global outlook turn the nation into a bright spot for wealth management.
UBS Group AG, Deutsche Bank AG, and Julius Baer Group Ltd. are among firms hiring private bankers to serve clients from the world’s fifth-biggest economy, which has an estimated $14.2 trillion in wealth, according to Credit Suisse Group AG.
The tilt towards India, forecast to be the fastest-growing major economy next year, 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 swath of industries and delayed reopening after Covid Zero 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 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 Plc, which moved to shut its India private banking operations in 2016, is seeking a return next year to become “the leading international bank” for the country’s high-net-worth population, Nuno Matos, the bank’s head of wealth and personal banking, said in a LinkedIn post this month.
India’s wealth market consists of both residents of the country and the so-called non-resident segment for the diaspora, which counts many millions globally.
UBS is hiring three in Singapore from Credit Suisse to cater to Indians overseas. Switzerland’s biggest bank last month said it will strengthen its coverage of non-resident Indians, which it serves from Singapore, London and the Middle East. Nomura Holdings Inc. is also planning hires in Dubai to cover the same market.
Deutsche Bank recently hired Nisheet Gupta from Standard Chartered Plc 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 Amrit Singh, Deutsche Bank’s head of global South Asia for the international private bank unit.
India’s stock market value more than doubled during the six years through 2021, adding to the nation’s invested wealth. That compares with an 89% increase in the MSCI All Country World Index.
In August, India’s central bank relaxed certain rules on overseas investments, a change that’s expected to lead more Indian investors to put money to work abroad, according to Pranav Sayta, partner and leader, international tax and transaction services at EY India.
The hires to tap the subcontinent’s wealth are in contrast to shrinking global headcount last year at some of Asia’s biggest wealth managers that disclose adviser numbers. UBS advisers declined by 2.6% last year from a year earlier, while Julius Baer’s relationship managers fell 7.4% over the same period.
Richest Indians
India’s two richest people now rank among the world’s top billionaires. Gautam Adani, the world’s third-richest, is considering setting up a family office in Dubai or New York, Bloomberg News reported last month. A spokesperson for the Adani Group denied the plan. Mukesh Ambani, who controls Reliance Industries Ltd., and is ranked 8th-wealthiest globally, is opening in Singapore, Bloomberg News reported in October.
To be sure, some see India’s growth slowing. Goldman Sachs Group Inc. lowered its forecast for the nation’s economy next year, 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 is slowly easing pandemic restrictions.
In previous years, global wealth managers opted to exit India’s private-wealth market after finding it difficult to attract clients and fees.
“Wealth managers abroad are beginning to realize that, in terms of wealth creation, India is not a minuscule market,” Sayta said.
–With assistance from Karthikeyan Sundaram, Jeanette Rodrigues, Robert Fenner and Ishika Mookerjee.
(Adds India’s stock market gains in tenth paragraph. An earlier version corrected Rahul Malhotra’s location to Dubai.)
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