UBS has reversed course on offshore banking for wealthy Indians from Singapore. The Swiss bank is letting go new hires just months after recruiting them, finews.asia can reveal exclusively.
By Shruti Advani, Guest Contributor finews.asia
In an apparent volte-face, UBS is pruning its non-resident Indian, or NRI, business again, two sources familiar with the matter told finews.asia. Six bankers catering to the NRI segment are being let go from the bank’s Singapore team, mere months after they were hired.
The bankers were largely junior-level employees – most were associate directors and directors. The move is nevertheless significant because the bank has already reversed course in this segment once before.
Cold Feet
Nearly four years ago, UBS practically dismantled its NRI business. The Swiss private bank let the majority of its bankers in Hong Kong go in November 2014, and severely cut back its Singapore team. Until then, the bank had both a strong Indian client base as well as a sturdy brand, so its decision to withdraw came as a shock to many in the industry.
«It's bad optics and will make hiring slightly tenuous going forward, but this is not the first time UBS has got cold feet about the global Indian segment», one industry source said. He added that the low-margin, balance sheet-intense nature of the business was probably a factor behind the decision.
Geography vs Heritage
The decision to prune the business would have been overseen by August Hatecke, UBS' head of wealth management Southeast Asia. He reports to Edmund Koh, the bank’s head of private banking in wider Asia.
To be sure, UBS isn't the only big wealth manager to rethink the segment. Several large players have tried to reorganize legacy Indian clients by geography rather than lump all of them together.
«It is a common misconception in our industry that Indian clients want Indian bankers», a British banker at an American bank in Hong Kong told finews.asia. «I bank Indian clients all the time and they have never asked to be reassigned, so I am not sure we could justify the idea of an exclusive market segment.»
