UBS Bucks the Wealth Onshoring Trend in India
Several private banks have been expanding in India’s onshore market and enjoying the fruits of their labor. UBS has bucked the trend by ending its on-the-ground presence in the fastest-growing economy in the world.
On Tuesday, UBS decided to exit the onshore wealth market in India by selling its local business to 360 ONE WAM for 3.07 billion rupees ($36 million). The deal will also see the Swiss bank acquire warrants for a 4.95 percent stake in 360 ONE and serve the Indian wealth manager’s clients booked in Singapore.
The onshore India business was inherited as part of the government-brokered takeover of Credit Suisse.
Expansion by Global Rivals
In contrast, several UBS’ global rivals have been increasingly expanding their onshore presence in India, with some seeing returns.
In its financial results, LGT said it has been expanding its presence in India with local market activities developing «favorably». Julius Baer saw net new money inflows of 14.2 billion Swiss francs ($17.2 billion) in 2024, citing strong contributions from key markets including India.
In February, HSBC’s Asia private banking head Lok Yim also told finews.asia that India was one of the key sources of inflows last year. Earlier this year, the British bank also launched a new office and branches in the country’s financial center, GIFT City, to serve clients, including those of the private bank.
Doubling Down on China
While UBS also has other onshore presences in Asia such as Taiwan, Japan, and Australia, there is only one other market in the region sizeable enough to offset an absence in India: mainland China. Here, the Swiss bank has been doubling down after acquiring the remaining 33 percent stake in UBS Securities from Beijing State-owned Assets Management in March, allowing it to take full control of its onshore unit.
According to UBS group CEO Sergio Ermotti, China is a «central pillar» of the bank’s growth ambition.
«The move to full ownership of UBS Securities […] enables us to expand further our investment banking and wealth management offering in China,» added APAC president and wealth co-president Iqbal Khan. «Not only will we be able to capitalize on the tremendous business opportunities as China's financial sector opens up, but we will also gain better access to the unique wealth creation that we can support with our products, services, and advice.»
Alluring Business Outlook
Although UBS will continue to serve global Indians through its offshore business, it will take the risk of missing out on the onshore opportunities. According to the bank’s «Global Wealth Report 2024», India will experience one of the fastest growth rates in its millionaire population, with the count surging by 22 percent to 1.06 million between 2023 and 2028.
And much of this wealth is being invested in markets in what Nitin Singh, the Asia head of Barclays Private Bank, called a «rapid financialization of assets» amongst ultra-high net worth individuals during the «Bloomberg Wealth Summit» last year, further driving opportunities for the industry.
Nation of Savers
«India historically has always been a nation of savers. I think the interesting thing that has happened throughout the last few years is that it’s become a nation of investors,» said Singh, who is based in Mumbai – a rare location for his role. «It’s a very exciting place to be as a wealth manager today. Clients are becoming more sophisticated. They are asking for more, and I think you’re going to see that continue to happen secularly over the next few years.»
